ROBERTS GRAY PTY LTD (ABN 73 610 258 127) TRADING AS ROBERTS GRAY LAWYERS	Plaintiff
v
BRUNNER, MARK JONATHAN IRVING	First Defendant
REGISTRAR OF TITLES	Second Defendant
JAMES KELLAM	Third Defendant
P.G. WALTON INVESTMENTS PTY LTD (ABN 70 079 0328 251)	Fourth Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	12 & 13 May 2020
DATE OF JUDGMENT:	9 March 2021
CASE MAY BE CITED AS:	Roberts Gray Pty Ltd v Brunner & Ors
MEDIUM NEUTRAL CITATION:	[2021] VSC 76

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EQUITY – Equitable interests – Priority between prior unregistered mortgage and subsequent equitable charge – Whether the plaintiff had notice of the prior equitable interest – Whether notice of prior equitable interest is fatal to the plaintiff’s claim for priority – Whether prior interest holder engaged in conduct which would disentitle him from claiming priority – Heid v Reliance Finance Corporation (1983) 154 CLR 326; Moffett v Dillon [1999] 2 VR 480, applied – Subrogation – Whether the third defendant is entitled to be subrogated to a prior registered mortgage – Whether plaintiff should be permitted to amend caveat – Percy & Michele Pty Ltd v Gangemi [2010] VSC 530, referred to – Whether trustee should be appointed for the sale of land – Transfer of Land Act 1958 (Vic) ss 77, 90(2), 90(3), 103 and 118.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr MGR Gronow QC with Mr AM Christophersen	Roberts Gray Lawyers
For the Third Defendant	Mr B Harding	Diamonds Solicitors

HER HONOUR:

Introduction & Background

The plaintiff, Roberts Gray Pty Ltd (‘Roberts Gray’), is a firm of solicitors. Its principal is Mr Rhys Roberts. The first defendant, Mr Mark (‘Jon’) Brunner, is a former client of Roberts Gray. Mr Brunner, a businessman, was declared bankrupt on 20 February 2020. This proceeding concerns the priorities to be afforded to certain secured creditors of Mr Brunner with respect to their claims to a property owned by Mr Brunner at 580 Yandoit Creek Road, Franklinford (‘land’), a disused mining site near Daylesford, Victoria.

A number of parties claim a security interest in the land, the value of which is uncertain, but is unlikely to far exceed $300,000.00. Roberts Gray claims an interest as chargee, pursuant to a charge in its favour executed by Mr Brunner on 5 July 2018 (‘charge’) to secure outstanding legal fees and disbursements incurred by him with respect to various legal proceedings between 2016 and 2018. Those proceedings include a proceeding between him and his former partner in the Family Court of Australia (‘Family Court proceeding’), a dispute with the Australian Taxation Office (‘ATO’), and a proceeding in relation to a failed property transaction in this Court. The third defendant, Mr James Kellam, an associate of Mr Brunner, claims to be entitled to register a mortgage said to have been executed in his favour by Mr Brunner on 26…

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 Roberts Gray Pty Ltd v Brunner

Details

AGLC: Roberts Gray Pty Ltd v Brunner [2021] VSC 76
Case: [2021] VSC 76
Decision Date: 9 March 2021

CaseChat Overview and Summary

Roberts Gray Pty Ltd brought proceedings against Brunner, as well as two other defendants, in the Supreme Court of Victoria. The central dispute was about the priority of various interests in a property, specifically a prior unregistered mortgage and a subsequent equitable charge. The plaintiff sought a declaration of priority of its interest, subrogation of the third defendant's interest, permission to amend a caveat, and the appointment of a trustee for the sale of the land. The defendants contested the plaintiff's claims, arguing that the plaintiff had notice of the prior equitable interest, which should disentitle it from claiming priority, and that the third defendant was not entitled to be subrogated to the prior registered mortgage.

The primary legal issues before the court were whether the plaintiff's notice of the prior equitable interest was fatal to its claim for priority, and whether the prior interest holder had engaged in conduct that would disentitle him from claiming priority. Additionally, the court had to determine if the third defendant was entitled to be subrogated to the prior registered mortgage, and whether the plaintiff should be permitted to amend a caveat. The defendants also argued that a trustee should be appointed for the sale of the land.

The court examined the principles established in Heid v Reliance Finance Corporation and Moffett v Dillon, concluding that the plaintiff's notice of the prior equitable interest did not automatically defeat its claim for priority. However, the prior interest holder's conduct was found to disentitle him from claiming priority. The court held that the third defendant was not entitled to be subrogated to the prior registered mortgage, as the conditions for subrogation were not satisfied. The plaintiff's request to amend the caveat was also denied. Lastly, the court decided that a trustee should be appointed for the sale of the land, in accordance with the relevant provisions of the Transfer of Land Act 1958 (Vic).

In conclusion, the court found in favour of the plaintiff, granting a declaration of priority of its interest, but denying the other reliefs sought. The court also appointed a trustee for the sale of the land.

Orders