second mortgage containing attornment clause-Operation as demise to mortgagor reserving rent service incident to reversion-Operation as estoppel between mort- gagor and mortgagee--Right of distress against goods of stranger-Landlord and Tenant Act 1899 (N.S.W.) (No. 18 of 1899), sec. 55*. Real Property (N.S.W.)-Mortgages, charges and encumbrances-Powers and remedies

of mortgagee-Distress-Real Property Act 1900 (N.S.W.) (No. 25 of 1900), secs. 57, 60, 63*.

The goods of a stranger not a party nor a privy to the estoppel created by an attornment of tenancy to a person having no reversion are not liable to distress although found upon the premises the subject of the attornment. The Real Property Act 1900

power to distrain hereinafter contained (N.S.W.) provides, by sec. 57 :- Any

for the rent then due; or (c) bring an mortgage OF encumbrance under this

action of ejectment to recover the said Act shall have effect as a security but

land, either before or after entering into shall not operate as a transfer of the

the receipt of the rents and profits land thereby charged

thereof or making any distress as afore- sec. 60: The mortgagee or encum-

said, and either before or after any sale brancee upon default in payment of the

of such land effected under the power principal sum or any part thereof, or of

of sale given or implied in his memoran- any interest

dum of mortgage or of encumbrance secured by any mortgage or encum-

in the same manner in which he might brance may-(a) enter into possession

have made such entry or distress or of the mortgaged or encumbered land

brought such action if the principal by receiving the rents and profits there-

sum or annuity were secured to him by for; or (b) distrain upon the occupier

a conveyance of the legal estate in the or tenant of the said land under the

land SO mortgaged or encumbered."

49 CLR 454

A mortgagee under the Real Property Act 1900 (N.S.W.) is entitled to a statutory charge which gives him no estate or interest in the land available as a reversion to which distress might be incident.

By memorandum of second mortgage under the Real Property Act 1900 (N.S.W.) to secure repayment of a certain sum, the mortgagor had attorned tenant at a certain rental and was in possession of the mortgaged premises, He made default in payment under the mortgage, and the mortgagee, treating the moneys due as rent, levied a distress and seized and sold the goods and chattels upon the mortgaged premises, including goods the property of the mortgagor's wife, who was not a party to the mortgage. The mortgagee had not served notice demanding to enter into receipt of the rents and profits of the mortgaged premises.

Held, that the attornment clause operated only to create an estoppel inter partes and therefore that the mortgagee did not have the right to distrain…

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.

Continue reading Partridge v McIntosh & Sons Ltd

Details

AGLC: Partridge v McIntosh & Sons Ltd [1933] HCA 38
Case: [1933] HCA 38
Decision Date: 21 August 1933

CaseChat Overview and Summary

The case of *Partridge v. McIntosh & Sons Ltd.* concerned an appeal to the High Court of Australia from a decision of the Supreme Court of New South Wales. The dispute arose when McIntosh & Sons Ltd., a mortgagee, distrained upon and sold goods found on mortgaged premises, including goods belonging to the mortgagor's wife, Mrs. Partridge. Mrs. Partridge contended that her goods were unlawfully seized.

The central legal issues before the High Court were whether the mortgagee, by virtue of a registered second mortgage containing an attornment clause, had the lawful right to distrain upon the goods of a stranger (Mrs. Partridge) found on the mortgaged premises, and whether such a right existed independently of the mortgagee serving notice to enter into receipt of rents and profits. The mortgagor had defaulted on the mortgage payments, and the mortgagee treated the outstanding amounts as rent.

The High Court held that the attornment clause in the mortgage operated solely to create an estoppel *inter partes* between the mortgagor and the mortgagee. Crucially, it did not create a legal reversion in the mortgagee to which the right of distress was incident. Therefore, the mortgagee did not possess the right to distrain upon the goods of a stranger, such as Mrs. Partridge, who was not a party to the estoppel. The Court further found that the provisions of section 60 of the *Real Property Act 1900* (N.S.W.) did not grant the mortgagee the authority to distrain on the goods of a stranger in these circumstances, nor was the requirement for notice under section 63 of the Act satisfied.

Consequently, the High Court reversed the decision of the Supreme Court of New South Wales on the point concerning the mortgagee's right to distrain on the goods of a stranger, allowing the appeal. The appeal was allowed with costs, and the formal verdict for Mrs. Partridge was to be entered.

Orders