Lumbers & Anor v W Cook Builders Pty Ltd (in liquidation)

The High Court of Australia considered an appeal by the liquidators of W Cook Builders Pty Ltd (in liquidation) against a decision of the Full Court of the Supreme Court of South Australia. The dispute concerned the enforceability of a charge granted by the company to the respondent, Mr Lumbers, over certain land. The liquidators sought to have the charge declared void as against them.

The central legal issue before the High Court was whether the charge granted by W Cook Builders Pty Ltd to Mr Lumbers was a registrable mortgage under the *Real Property Act 1886* (SA) and, if so, whether its failure to be registered rendered it void against the liquidators as statutory trustees for the creditors of the company. The court also had to consider the effect of the company's insolvency on the validity of the unregistered charge.

The High Court held that the charge was not a registrable mortgage under the *Real Property Act 1886* (SA) because it did not conform to the statutory form prescribed for mortgages. Consequently, it could not be registered. The court reasoned that an unregistered instrument that is not in registrable form does not create an equitable interest that can prevail against the statutory rights of a liquidator, who stands in the position of a statutory trustee for the creditors. The liquidators were therefore entitled to treat the charge as void.