Mulherin v Bank of Western Australia Ltd

The plaintiff, Mulherin, was involved in a dispute with the Bank of Western Australia Limited regarding the enforceability of certain charges and mortgages. The case was heard in the Federal Court of Australia. Mulherin, as a creditor of a company, sought to enforce a priority deed between herself and another creditor, alleging that the bank's failure to disclose a breach of the priority deed amounted to unconscionable conduct. The bank, on the other hand, argued that the priority deed was unenforceable due to the absence of an equitable mortgage and that the failure to disclose the breach did not constitute misleading or deceptive conduct.

The court was required to determine several legal issues, including whether Mulherin could establish a common assumption necessary for estoppel by convention, what constituted an equitable mortgage in this context, and whether the bank's failure to disclose the breach of the priority deed amounted to misleading or deceptive conduct. Additionally, the court had to consider whether the transaction between Mulherin and the company was an insolvent or commercial transaction, and whether it provided an unfair preference to Mulherin.

In its reasoning, the court held that Mulherin could not establish the common assumption necessary for estoppel by convention, as the assumption of each party was incorrect but not shared. The court further found that the acts between Mulherin and the company did not create an equitable mortgage. Regarding the bank's failure to disclose the breach of the priority deed, the court determined that the bank was not under any obligation to inform Mulherin of the breach, as there was no misleading or deceptive conduct. Finally, the court held that the transaction between Mulherin and the company was not an insolvent or commercial transaction and did not provide an unfair preference to Mulherin.

The court ordered that Mulherin's claims against the bank be dismissed, and the priority deed between Mulherin and the other creditor was declared unenforceable. The bank was not required to pay any costs to Mulherin or the other creditor.