St George Bank v Meredith

St George Bank, a mortgagee, sought a declaration regarding competing claims to a surplus arising from the sale of a property. The case was heard in the Supreme Court of New South Wales. The dispute involved two parties, the mortgagee, St George Bank, and a creditor, who had both made claims to the surplus that had been paid into court following the sale of the mortgaged property.

The central legal issues revolved around the priority of the claims to the surplus, the application of statutory and equitable obligations under the Real Property Act 1900 (NSW), and the relevant date for the accrual of the creditor’s claim, considering the limitation defence. The court also examined the appropriateness of the interpleader procedure under the Trustee Act 1925 (NSW) and the entitlement to pre-judgment interest and costs in such proceedings.

The court determined that the creditor’s claim was not time-barred as it was acknowledged by the payment made by the mortgagee, which constituted an exception to the limitation defence. The court held that the relevant date for the accrual of the creditor's claim was when the surplus was paid into court, not when the sale occurred. Regarding the priority of claims, the court ruled in favour of the creditor, who had a superior claim to the surplus due to their prior creditor status. The court also addressed the issue of pre-judgment interest, holding that it should be paid to the successful claimant from the date the surplus was paid into court. The final orders included the declaration in favour of the creditor, the payment of pre-judgment interest, and the direction that costs be paid out of the surplus.