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Mathieson Nominees Pty Ltd v Aero Developments Pty Ltd

Mathieson Nominees Pty Ltd v Aero Developments Pty Ltd

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Case Copied 5 April 2016 77 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2010 01564

MATHIESON NOMINEES PTY LTD (ACN 005 328 012)	Plaintiff
v
AERO DEVELOPMENTS PTY LTD & OTHERS	Defendants

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JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	2–4 DECEMBER 2015
DATE OF JUDGMENT:	5 APRIL 2016
CASE MAY BE CITED AS:	MATHIESON NOMINEES v AERO DEVELOPMENTS & ORS
MEDIUM NEUTRAL CITATION:	[2016] VSC 131

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REAL PROPERTY – Torrens scheme of registration of land in Victoria under ss 40 to 43 of the Transfer of Land Act 1958 (the “TLA”) – In personam exception to indefeasibility – Claim under Barnes v Addy – Knowing receipt (first limb) and knowing assistance (second limb) – Knowledge an essential requirement under both limbs – Knowledge under first limb – The Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) applied – Knowledge under second limb – Farah Constructions Pty Ltd v Say-Dee Pty Ltd applied – Tests as to knowledge under both limbs of Barnes v Addy the same – Barnes v Addy claims not established on the facts – No breach of any relevant fiduciary duty and no relevant knowledge of any such breach – Claim under Barnes v Addy not a personal equity which defeats the indefeasibility provisions of the TLA – Farah Constructions v Say-Dee settles the question – Observations of Tadgell JA in Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd on the law in Australia – No basis for maintaining any in personam exception to the indefeasibility of the title of the registered proprietor.

SALE OF LAND – Effect of nomination of party to take transfer – Whether a charge on the land enforceable against nominated party – Construction of nomination clause.

SECURITIES – Fixed and floating charge over company assets – Whether an equitable charge or an equitable mortgage – An equitable charge and an equitable mortgage both create a proprietary right in the charged property – Differences between an equitable mortgage and an equitable charge – Equitable mortgage created.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Agardy	Armytage Corporate Lawyers
For the First Defendant	Mr T R Messer	Kliger Partners

HIS HONOUR:

The Plaintiff, Mathieson Nominees Pty Ltd (“Mathieson Nominees”), claims that it is entitled to an equitable charge over subdivisional land at Point Cook in Victoria and that it has an interest in the land capable of supporting a caveat.

The land in question (the “Property”) was situated and known as Boardwalk Estate Lot LL Boardwalk Boulevard, Point Cook, Victoria. It was comprised in plan of subdivision No. PS 511526L and described in certificate of title volume 10834 folio 436. The Property was located directly opposite the Point Cook town centre, approximately 500 metres south of the Princes Freeway within the suburb of Point Cook.

At all relevant times, the Property was vacant land, although a town planning permit No. WPS 5394 had been issued which permitted a 22 lot subdivision of the…

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.

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Details

Case: [2016] VSC 131
Decision Date: 5 APRIL 2016

CaseChat Overview and Summary

Mathieson Nominees Pty Ltd sued Aero Developments Pty Ltd in the Supreme Court of Victoria, contesting the enforceability of a charge on land and the validity of a transfer of land. The dispute centred on the in personam exception to indefeasibility under the Torrens system and the enforceability of a nominated transfer clause. The court had to determine whether Mathieson could claim knowing receipt or knowing assistance under Barnes v Addy, and whether the charge on the land was enforceable against the party nominated to take the transfer. Additionally, the court had to interpret the nomination clause in the context of the transfer of the land.

The court examined the requirement of knowledge for both limbs of the Barnes v Addy claim, finding that knowledge was essential under both. For the first limb, the court applied the principles from The Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) and found that the knowledge standard under the second limb was the same. The court found no breach of fiduciary duty and no relevant knowledge of such a breach, concluding that Mathieson's Barnes v Addy claims were not established on the facts. The court further observed that there was no personal equity that could defeat the indefeasibility provisions of the Transfer of Land Act 1958. The court referenced the observations of Tadgell JA in Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd, ultimately determining that there was no basis for maintaining an in personam exception to the indefeasibility of the title of the registered proprietor.

In relation to the sale of land, the court held that the nomination clause in the contract did not create an equitable charge or equitable mortgage, but rather an equitable mortgage. The court concluded that the clause in question created a proprietary right in the charged property, which was enforceable against the party nominated to take the transfer. The court's interpretation of the nomination clause resulted in the charge on the land being enforceable against the party nominated to take the transfer.

The court dismissed Mathieson's claims, finding that the charge on the land was enforceable against the nominated party, and that there was no in personam exception to the indefeasibility of Aero Developments' title. The court held that the equitable mortgage created by the nomination clause was valid and enforceable, and that the transfer of the land was valid. The court made no orders for costs.

Orders