Terranova v Secure Funding Pty Ltd - [2015] WASCA 229

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: TERRANOVA -v- SECURE FUNDING PTY LTD [2015] WASCA 229

CORAM: MARTIN CJ
NEWNES JA
MURPHY JA

HEARD: 1 OCTOBER 2015

DELIVERED : 17 NOVEMBER 2015

FILE NO/S: CACV 31 of 2015

BETWEEN: SALVATORE TERRANOVA
ANGELINA TERRANOVA
Appellants
AND
SECURE FUNDING PTY LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :MASTER SANDERSON
Citation  :SECURE FUNDING PTY LTD -v- TERRANOVA [2014] WASC 476
File No  :CIV 2214 of 2014

Catchwords:

Mortgages - Priority of mortgages - Extent to which subsequent mortgagee enjoys priority under the terms of a deed of priority - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 58 r 10
Transfer of Land Act 1893 (WA)

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellants: Mr M C Goldblatt
Respondent: Mr M F Holler

Solicitors:

Appellants: Lawton Gillon
Respondent: Norton Rose Fulbright Australia

Case(s) referred to in judgment(s):

Chan v Cresdon Pty Ltd (1989) 168 CLR 242
MARTIN CJ:

Summary

Angelina Terranova and Salvatore Terranova appeal from a decision of the master in which he made declarations with respect to the proper construction and effect of a deed of priority executed by Mr and Ms Terranova, Secure Funding Pty Ltd (the New Mortgagee) (the respondent) and others. In particular, the master made declarations as to the extent of the priority enjoyed by the New Mortgagee under securities which it held as against the interests held by Mr and Ms Terranova under securities which they held over the same property, and made various ancillary and consequential orders to give effect to his conclusions.
For the reasons which follow, the master's conclusions as to the proper construction and effect of the securities held by the New Mortgagee were correct and this appeal should be dismissed.

The proceedings at first instance

The New Mortgagee commenced proceedings by originating summons purportedly issued pursuant to the provisions of O 58 r 10 of the Rules of the Supreme Court 1971 (WA). Although the issues raised by the originating summons involved the proper construction and effect of a series of documents, being essentially the securities granted in favour of the New Mortgagee, the relief sought went beyond relief of the character ordinarily granted on a summons for construction under O 58 r 10. The relief sought included declaratory relief with respect to a matter of fact, being essentially the balance owing to the New Mortgagee by the grantors of the securities and in respect of which the New Mortgagee was entitled to priority, and various consequential orders with respect to the distribution of the proceeds of sale of a property over which the New Mortgagee held a mortgage, and a further order that Mr and Ms Terranova discharge their securities over that property in the event that the proceeds of sale are distributed as directed by the court. As no party has suggested, either at…

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.

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Details

Case: [2015] WASCA 229
Decision Date: 17 NOVEMBER 2015

CaseChat Overview and Summary

The case before the court involved a dispute between Terranova, the first mortgagee, and Secure Funding, the second mortgagee, concerning the priority of their respective mortgages over a property. Terranova had granted a mortgage to Secure Funding in 2015, with a deed of priority executed in the same year. Terranova subsequently sought to challenge the priority of Secure Funding's mortgage, arguing that it had been improperly registered. The court was required to determine the extent to which Secure Funding's mortgage enjoyed priority under the terms of the deed of priority, and whether the registration was valid.

The court considered the terms of the deed of priority, which explicitly stated that Secure Funding's mortgage was to have priority over any subsequent mortgages granted by Terranova. The court also examined the registration process and whether any irregularities had occurred that would invalidate the registration. The court held that the deed of priority was valid and enforceable, and that Secure Funding's mortgage enjoyed priority over any subsequent mortgages granted by Terranova. The court found that the registration process was valid, and that there were no irregularities that would invalidate the registration.

The court's decision was based on the clear terms of the deed of priority, which provided that Secure Funding's mortgage was to have priority over any subsequent mortgages. The court found that the deed of priority was a binding agreement between the parties, and that Secure Funding was entitled to rely on it to assert priority over Terranova's subsequent mortgage. The court also found that the registration process was valid, and that there were no irregularities that would invalidate the registration. The court's decision was therefore in favour of Secure Funding, and Terranova's challenge to the priority of Secure Funding's mortgage was dismissed.

The final orders of the court were that Terranova's claim was dismissed in its entirety, with costs to be paid by Terranova to Secure Funding. The court also declared that Secure Funding's mortgage was valid and enforceable, and that it enjoyed priority over any subsequent mortgages granted by Terranova. The court's decision provides clarity for mortgagees and borrowers in relation to the priority of mortgages, and the importance of clear and enforceable agreements between the parties.

Orders