Mead v Farrow Mortgage Services Pty Ltd (in Liquidation); Collins v Farrow Mortgage Services Pty Ltd (in Liquidation)

In the Supreme Court of New South Wales Court of Appeal, the applicants, Mead and Collins, sought to appeal against decisions of the primary judge that dismissed their claims against Farrow Mortgage Services Pty Ltd (in liquidation). The dispute concerned the applicants' entitlement to certain funds held by the company, which had been placed into liquidation.

The central legal issues before the Court of Appeal were whether the primary judge had erred in finding that the applicants had not established a proprietary claim over the funds, and consequently, whether the applicants were merely unsecured creditors of the company. The court was required to consider the nature of the arrangements between the applicants and the company, and whether these arrangements created a trust or other proprietary interest in the funds.

The Court of Appeal affirmed the primary judge's findings. It reasoned that the applicants had failed to demonstrate that the funds were held by the company on trust for them. The court applied the principles governing the creation of trusts, particularly the requirement for clear intention to create a trust and the identification of trust property. In this instance, the court found that the funds had been mixed with the company's general assets, and the applicants had not established a sufficient nexus or identifiable fund to support a proprietary claim. Therefore, the applicants were found to be unsecured creditors.

The appeals were dismissed.