Property Builders Pty Ltd v Adelaide Bank Ltd

Property Builders Pty Ltd (the first plaintiff) appealed to the Court of Appeal of New South Wales against orders made in favour of Adelaide Bank Ltd (the first defendant). The dispute concerned a loan agreement and a related mortgage, and whether the assignment of the mortgage also effected an assignment of the secured debt and any associated guarantee.

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.