Perpetual Trustees Victoria Ltd v Tsai [2004] NSWSC 745
HEARING DATE(S):
05/08/04
JUDGMENT DATE:
5 August 2004
JURISDICTION:
Common Law Division Possession List
JUDGMENT OF:
Young CJ in Eq
DECISION:
Appeal allowed with costs. The order of the learned Master is set aside.
CATCHWORDS:
CONVEYANCING [155]- Torrens System- Allegedly forged mortgage registered without fraud of mortgagee- Indefeasible- However personal covenant in ancillary allegedly forged document not indefeasible. MORTGAGES [4]- Alleged forgery- Both registered mortgage and associated document containing covenant to repay allegedly forged- Former indefeasible, latter not.
Louis Tsai (Appellant) Perpetual Trustees Victoria Limited (1st Respondent) The Registrar-General of New South Wales (2nd Respondent)
FILE NUMBER(S):
SC 11777/03
COUNSEL:
I Wales SC (Appellant) S R Donaldson SC (1st Respondent) P B Walsh (2nd Respondent)
SOLICITORS:
Fox & Staniland (Appellant) Blake Dawson Waldron (1st Respondent) K C Hall (2nd Respondent)
LOWER COURTJURISDICTION:
Supreme Court (Master)
LOWER COURT FILE NUMBER(S):
11777/03
LOWER COURT JUDICIAL OFFICER :
Master Harrison
IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION POSSESSION LIST
YOUNG CJ in EQ
Thursday 5 August 2004
11777/03 – PERPETUAL TRUSTEES VICTORIA LTD v TSAI
JUDGMENT
1 HIS HONOUR: This an appeal from Master Harrison who gave summary judgment for a mortgagee against a mortgagor. The learned Master’s order was that the mortgagee have possession of the subject premises and that the mortgagor pay the mortgagee a sum of money in excess of $500,000.
2 The notice of appeal suggests that the learned Master erred in admitting certain evidence and that she erred in holding that a decision of Studdert J in Ginelle Finance Pty Ltd v Diakakis [2004] NSW Conv R 56-064 was determinative of these proceedings.
3 There is no doubt at all that mortgage number 9412518J affecting the whole of Folio Identifier 1/73633 binds the title of that property in favour of Perpetual Trustees Victoria Limited, the plaintiff. The registered proprietor is the present appellant. That mortgage is a simple two page document which merely incorporates the memorandum No 3161863 filed with the Registrar General under s 80A 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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Perpetual Trustees Victoria Ltd v Tsai [2004] NSWSC 745
Case
[2004] NSWSC 745
Decision Date
CaseChat Overview and Summary
In the matter of Perpetual Trustees Victoria Ltd v Tsai, the dispute involved a property mortgage registered under the Torrens title system. The central issue was whether a mortgage, which was allegedly forged, could be considered valid and indefeasible. Additionally, the case examined whether a personal covenant in an ancillary document, also allegedly forged, could be enforced. The Full Court of the Federal Court of Australia was the deciding authority.
The court was tasked with determining the extent of indefeasibility in the context of a forged mortgage and an associated document. It had to consider whether the registration of a forged mortgage under the Torrens system rendered it indefeasible and whether a personal covenant contained in an ancillary document, which was also forged, could be enforced despite the forgery. The central legal issues were whether fraud of the mortgagee negates indefeasibility and whether a personal covenant in a forged document could be enforced independently of the registered mortgage.
The court found that the forged mortgage was indefeasible under the Torrens system, provided there was no fraud on the part of the mortgagee. The registration of the forged mortgage under the system rendered it valid and protected from claims of forgery. However, the personal covenant in the ancillary document, which was also allegedly forged, was not indefeasible. The court held that the personal covenant could not be enforced independently of the registered mortgage. This decision highlighted the distinction between the indefeasibility of the registered mortgage and the enforceability of personal covenants in associated documents, even when those documents are forged.
The court's ruling resulted in the mortgage being deemed indefeasible, while the personal covenant in the ancillary document was not enforceable. The decision underscored the importance of the distinction between the indefeasibility of the registered interest and the enforceability of ancillary documents, particularly in cases involving alleged forgery.