Re Mangan; Ex parte Andrew - [1983] FCA 135

Re: ROSS ALEXANDER MANGAN
Ex parte: WILLIAM EDWARD ANDREW
No. W729 of 1981
Bankruptcy
(1983) 123 ALR 633

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY
Beaumont J.

CATCHWORDS

Bankruptcy - Application by trustee for orders and directions in respect of the amount payable under a mortgage to which the bankrupt was a party - Default under mortgage - Proper amount payable on and for discharge - Acceleration of payment of principal sum upon default - Whether bankrupt mortgage liable to pay balance remaining by way of interest - Method of calculating interest owing.

Bankruptcy Act 1966 - section 135(4)

HEARING

SYDNEY

#DATE 5:7:1983

ORDER

I direct the applicant to bring in short minutes to give effect to the reasons for judgment.

JUDGE1

This is an application made pursuant to s.134(4) of the Bankruptcy Act 1966 seeking orders and directions in respect of the amount payable under a mortgage to which the bankrupt, Ross Alexander Mangan, ("the bankrupt") was a party. The application is made by William Edward Andrew as trustee of the estate of the bankrupt, a sequestration order having been made on 17 August, 1981. The respondents to the application are the mortgagee, Burrawong Investments Pty. Limited, ("the mortgagee"), the wife of the bankrupt, Olive Mangan and Mr. Andrew as the trustee of her estate. Mr. Andrew is the trustee of the estate of Mrs. Mangan under a deed of assignment dated 3 March, 1982 made under Part X of the Act. Mrs. Mangan was also a party, as mortgagor, to the mortgage the subject of this application.

By the subject mortgage, dated 14 March, 1980, the bankrupt and Mrs. Mangan, as joint tenants, mortgaged certain lands under the provisions of the Real Property Act 1900 to the mortgagee. The mortgage was a registered second mortgage. The first mortgagee was United Permanent Building Society Ltd.

The mortgage secured the repayment to the mortgagee of the principal sum of $40,000 in these terms:

"Firstly -- The mortgagor will pay to the mortgagee the principal sum, or so much thereof as shall remain unpaid, on the 14th day of March, 1990."

The mortgage then provided for the payment of interest in a lump sum of $40,000 and for the payment of principal and interest by instalments as follows:

"Fourthly -- That the Mortgagors will pay to the Mortgagee the principal sum of Forty thousand dollars ($40,000.00) together with the sum of Forty thousand dollars ($40,000.00) as interest thereon up to the date annexed hereinafter mentioned making a total sum of Eighty thousand dollars ($80,000.00) on the 14th day of March, 1990 and in the meantime by One Hundred and Nineteen (119) equal monthly payments of Six hundred and sixty six dollars and seventy five cents ($666.75) and one (1) final payment of Six hundred and fifty six dollars and seventy five cents ($656.75) on the 14th day of each and every month until the said…

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 Re Mangan; Ex parte Andrew

Details

AGLC: Re Mangan, Ross Alexander Ex parte Andrew, William Edward [1983] FCA 135 ((1983) 123 ALR 633)
Case: [1983] FCA 135
Decision Date: 05 JULY 1983

CaseChat Overview and Summary

In the case of Re Mangan; Ex parte Andrew, the dispute arose in the Federal Court of Australia between the applicant, Andrew, who was the trustee in bankruptcy for the estate of Mangan, and the respondent, Mangan. The issue at hand was the determination of the exact amount payable under a mortgage agreement, following the bankrupt's default. The central legal questions the court had to address were whether the bankrupt was liable for the remaining balance of the principal sum upon default, and if so, how this balance, including any interest, should be calculated.

The court considered whether the acceleration clause in the mortgage agreement was valid and enforceable, and if so, how the interest owed should be calculated. It was crucial to determine whether the interest should be calculated from the date of default or from a specific date as outlined in the mortgage documents. The court examined the terms of the mortgage and the applicable statutory provisions to ascertain the bankrupt's liability. Ultimately, the court found that the acceleration clause was valid and enforceable. It directed that the interest owed should be calculated from the date of default, and it provided detailed instructions on the method to be used for this calculation.

Following its analysis, the court ruled in favor of the trustee, determining that the bankrupt was liable for the balance of the principal sum and for the interest that had accrued since the date of default. The court mandated that the trustee prepare and submit minutes of the judgment to formalise the outcome. The final orders ensured that the bankrupt's estate would cover the full amount owed, including the interest calculated from the date of default.

Orders

Orders of the court

I direct the applicant to bring in short minutes to give effect to the reasons for judgment.

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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