Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Property Builders Pty Limited v Adelaide Bank Limited [2011] NSWCA 266 Hearing dates: 27 July 2011 Decision date: 15 September 2011 Before: Bathurst CJ at [1]; Allsop P at [58]; Sackville AJA at [59] Decision: 1 Appeal allowed in part.
2 Orders 4 and 6 be set aside and the following orders made in lieu:
(a) Judgment against the first defendant in favour of the first plaintiff in the sum of $268,821.79 to take effect as at 29 July 2011 plus interest thereon until the date of payment at the rate referred to in the letter from Eurofinance Capital Pty Limited to Property Builders Pty Limited dated 31 March 2008, being 16.60 percent per annum.
(b) Direct the parties within 10 days to file written submissions as to the appropriate orders as to the costs of the appeal and the costs of the proceedings in the Court below.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: REAL PROPERTY - loan agreement - where loan "rolled over" - whether roll over of loan creates new loan
REAL PROPERTY - loan agreement - where mortgage assigned - whether secured debt also assigned
REAL PROPERTY - loan agreement -whether notice given - whether notice effective - whether legal or equitable assignment - Conveyancing Act 1919 (NSW) s 12
GUARANTEE AND INDEMNITY - whether guarantee assigned with principal debt - whether notices of assignment given under s 12 Conveyancing Act 1919 (NSW) are sufficient evidence of assignment of guaranteeLegislation Cited: Conveyancing Act 1919 s 6(1), s 12
Land Title Act 1994 (Qld) s 62
Real Property Act 1900 s 52, 80ACases Cited: Cator v Croydon Canal Co (1843) 160 ER 1149
Consolidated Trust Company Limited v Naylor (1936) 55 CLR 423
Fulham v M'Carthy (1848) 1 HLC 703
Holroyd v Marshall (1862) 10 HLC 191
Hutchens v Deauville Investments Pty Limited [1986] HCA 85; (1986) 68 ALR 367
International Leasing Corporation Limited v Aiken [1967] 2 NSWR 427
Nemeth v Reachcord Pty Limited [1998] NSWSC 271; (1998) 9 BPR 16,557
Queensland Premier Mines Pty Limited v French [2007] HCA 53; (2007) 235 CLR 81
Tailby v Official Receiver (1888) 12 App Cas 523Category: Principal judgment Parties: Property Builders Pty Limited (First Appellant)
Michael Phontos (Second Appellant)
Adelaide Bank Limited (First Respondent)
Advance Investment Finance No 2 Pty Limited (Second Respondent)
Eurofinance Capital Limited (Third Respondent)Representation: Counsel
Rod Freeman (First and Second Appellants)
M J Cohen (First, Second and Third Respondents)
Solicitors
Phontos Legal (First and Second Appellants)
Gadens Lawyers (First, Second and Third Respondents)
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- AGLC
- Property Builders Pty Ltd v Adelaide Bank Ltd [2011] NSWCA 266
- Case
- [2011] NSWCA 266
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the Court of Appeal were whether the "rollover" of a loan created a new loan agreement, whether the assignment of a mortgage also assigned the secured debt, and whether the notices of assignment given under section 12 of the Conveyancing Act 1919 (NSW) were effective to assign both the debt and any guarantee. The court also considered whether such notices constituted sufficient evidence of the assignment of the guarantee.
The Court of Appeal reasoned that the rollover of the loan did not create a new loan agreement but rather continued the existing one. It held that the assignment of a mortgage, in the absence of express words to the contrary, carries with it the secured debt. Furthermore, the court found that the notices of assignment given under section 12 of the Conveyancing Act 1919 (NSW) were effective to assign the secured debt. However, the court determined that the assignment of the principal debt did not automatically extend to the guarantee, and that the notices provided were not sufficient evidence of the assignment of the guarantee.
The appeal was allowed in part. The Court of Appeal set aside certain previous orders and substituted them with a judgment against the first defendant in favour of the first plaintiff for a specified sum, plus interest. The parties were directed to file written submissions regarding the costs of the appeal and the proceedings in the court below.
Orders
Orders of the court
1 Appeal allowed in part.
2 Orders 4 and 6 be set aside and the following orders made in lieu:
(a) Judgment against the first defendant in favour of the first plaintiff in the sum of $268,821.79 to take effect as at 29 July 2011 plus interest thereon until the date of payment at the rate referred to in the letter from Eurofinance Capital Pty Limited to Property Builders Pty Limited dated 31 March 2008, being 16.60 percent per annum.
(b) Direct the parties within 10 days to file written submissions as to the appropriate orders as to the costs of the appeal and the costs of the proceedings in the Court below.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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