Lane v Conlan

Lane & Anor v Conlan [2004] WASC 15 is a case heard by the Supreme Court of Western Australia. The plaintiffs, Rodney and Margaret Lane, are seeking summary judgment against the defendant, Mark Conlan, who is the liquidator of Rowena Pty Ltd, trading as Graeme Grubb Finance Brokers. The plaintiffs seek a declaration that they are entitled to the sum of $100,457.84 held by the defendant, as well as an order for the defendant to pay that sum to the plaintiffs. The case arises from the collapse of Rowena Pty Ltd and the plaintiffs' investment in mortgages arranged by Rowena.

The court had to decide whether the plaintiffs were entitled to the moneys paid by the mortgagor, Cordova Pty Ltd, under the covenants in two mortgages. The defendant argued that the plaintiffs were not entitled to the moneys because they were only the beneficiaries of an equitable interest, and that the moneys paid by Rowena (the finance broker) could be traced to other investors who may have a claim to the moneys. The plaintiffs argued that they were bona fide purchasers for value without notice of any breach of trust and therefore had good title to the covenants and the moneys paid by Cordova.

The court found that the plaintiffs were entitled to the moneys paid by Cordova pursuant to the covenants in the mortgages. The court held that the plaintiffs were bona fide purchasers for value without notice of any breach of trust by Rowena. The court also found that the plaintiffs had given value for the covenant to repay in Mortgage 2, even though the trust account was overdrawn between the time the plaintiffs paid moneys to Rowena and the time Rowena drew moneys out in relation to the Mortgage 2 transaction. The court concluded that the plaintiffs were entitled to summary judgment for the full amount of the claim.