Syme v Commonwealth

In *Syme v Commonwealth*, the plaintiff, a mortgagee, brought an action against the Commonwealth and the mortgagor's transferee, seeking to be paid compensation moneys agreed to be paid by the Commonwealth to the transferee. The Commonwealth had taken possession of portions of the mortgaged land under the National Security (General) Regulations. The plaintiff claimed entitlement to these compensation moneys as mortgagee, arguing they were analogous to rents and profits or represented a diminution of her security. The Commonwealth demurred to the statement of claim, contending that the compensation was payable only to the person with whom the agreement was made and who had suffered loss or damage, and that the plaintiff had not established any such entitlement.

The High Court was required to determine whether a mortgagee, not in possession, had a right to receive compensation paid by the Commonwealth to a mortgagor's transferee for the taking of possession of mortgaged land under the National Security (General) Regulations. Specifically, the court had to consider the nature of the compensation paid under regulation 60D and whether it represented a loss or damage to the mortgagee's interest in the property, or if it was personal to the recipient.

The Court, allowing the demurrer, held that the compensation paid by the Commonwealth to the transferee was for the personal loss or damage suffered by the transferee due to the taking of possession. It was not in the nature of a payment for the acquisition of the mortgaged property or a diminution of the mortgagee's security, nor did it represent any part of the capital value of the property to which the mortgagee could claim entitlement. The Court reasoned that the compensation was paid to the person who suffered the loss, and in this instance, that was the transferee, not the mortgagee. However, the Court noted that a mortgagee not in possession who suffers loss or damage by reason of the Commonwealth's actions under the Regulations would be entitled to claim compensation for their own loss.