The Trust Company Ltd v Feiner

[2014] NSWSC 1492

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

The Trust Company Ltd v Feiner [2014] NSWSC 1492

Hearing dates:

11/09/2014

Decision date:

11 September 2014

Jurisdiction:

Common Law

Before:

Garling J

Decision:

(1)Assess damages in the sum of $1.41 M.

(2)Assess interest on damages up to judgment in the sum of $112,568.22.

(3)Order that there be judgment in favour of Mrs Irena Feiner, pursuant to s 133(2) of the Real Property Act, against the cross-defendant, Edward Thomas Feiner, in the sum of $1,522,568.22.

(4)Order in each matter that the cross-defendant, Edward Thomas Feiner, is to pay Registrar-General's costs of the proceedings as assessed or agreed.

(5)Note that the judgment entered in proceedings 2011/251218 and proceedings 2012/241625 on 11 September 2014, relies upon the same underlying loss. Tthe Registrar General of New South Wales is not entitled to recover more than the sum fixed by one of the judgments.

Catchwords:

DAMAGES - assessment of damages - default judgment on cross-claims - real property - forged mortgage - claim on Torrens assurance fund - settlement - fair and reasonable - sum paid to settle proceedings sought - interest - COSTS - costs follow the event - no point of general principle

Legislation Cited:

Civil Procedure Act 2005
Real Property Act 1900

Cases Cited:

Registrar-General of New South Wales v LawCover Insurance Pty Ltd [2014] NSWCA 241

Category:

Principal judgment

Parties:

Ex parte
Registrar General of NSW (D2)

Representation:

Counsel:
A B Douglas-Baker (Registrar-General) (D2)

File Number(s):

2011/251218, 2012/241625

 Decision under appeal 

File Number(s):

2011/251218,
2012/241625

ex tempore Judgment

1. The Registrar General is the cross-claimant on Second Cross-Claims filed in each of the proceedings numbered 2011/251218 and 2012/241625. The proceedings have been conducted together and relate to the same underlying conduct.

1. On 15 August 2014 default judgment was entered on both cross-claims against the cross-defendant, Edward Thomas Feiner, in the name of Irena Feiner pursuant to s 133(2) the RealPropertyAct 1900. The Court ordered that damages be assessed.

1. The involvement of the Registrar General arises because Mrs Feiner made a claim on the Torrens Assurance Fund pursuant to s 129(1) of the RealPropertyAct. The Registrar General has settled Mrs Feiner's claim and has thereby subrogated to her claims against her youngest son, Mr Edward Feiner: see s 133(2) of the RealPropertyAct.

1. The cross-claims against Mr Feiner seek payment to the Registrar General of a sum equal to the amount of compensation payable from the Torrens Assurance Fund in respect of Mrs Feiner's compensable loss in accordance with s 129(1) of the RealPropertyAct, together with a sum indemnifying the Registrar General in respect of the costs for which the Registrar General would not otherwise be liable in respect of the proceedings.

1. The evidence before me discloses that the relevant active parties, which did not include Mr Edward Feiner, settled the proceedings on 17 June 2013. The basis of the settlement required the Registrar General to pay the sum of $1.41 M to the plaintiffs in discharge of the outstanding liability under a forged mortgage and in return for a discharge of that forged mortgage in registrable form. On 19 June 2013, this Court made orders that gave effect to the settlement by the active parties to the proceedings.

1. As I have earlier said, the Court entered default judgment against Mr Edward Feiner on 15 August 2014. It did so after the Registrar General amended the proceedings to comply with the terms of the judgment of the Court of Appeal, which was delivered on 25 July 2014: Registrar-General of New South Wales v LawCover Insurance Pty Ltd [2014] NSWCA 241.

1. It is necessary for the Court now to assess the amount of Mrs Feiner's compensable loss. Under the forged mortgage, the claimant, the plaintiff in the proceedings, The Trust Company (PTA) Limited's loss, was quantified as at 16 May 2013 as $2,189,244.89. This sum includes $16,258.94 by way of enforcement costs. In addition, legal costs were owed under the mortgage. At about that time, on the evidence before me, an expert valuer valued the various properties, the subject of the forged mortgage, at a total of $2.85 M.

1. I am satisfied that Mrs Feiner's compensable loss in respect of the forged mortgage, is constituted by the total market value of the properties at the time of the payment of compensation namely $2.85 M, less any benefit Mrs Feiner received when the original forged mortgage was entered into. Her case on this issue of benefit has included the discharge of an earlier mortgage to CitiBank in the sum of $644,817.45 less any residual proceeds of sale. A rational assumption about the residual proceeds of sale at that time was, I am satisfied, $350,000.

1. As consequence, allowing $150,000 by way of professional costs, a minimum calculation of the compensable loss would be in the order of $2 M. Thus, the quantum of Mrs Feiner's claim against Mr Edward Feiner was in the vicinity of $2 M less professional costs. The settlement was for less than this sum of money and, accordingly, on any view, represented a fair and reasonable settlement of Mrs Feiner's claim against the Torrens Assurance Fund arising from Mr Edward Feiner's alleged fraud.

1. Accordingly, what is sought in these proceedings is the sum of money paid by the Registrar General to settle the proceedings together with prejudgment interest calculated in accordance with s 100 of the CivilProcedureAct 2005 and Practice Note SC Gen 16. I am satisfied that the proper amount of interest is the sum of $112,568.22.

1. The Registrar General seeks an order that Mr Feiner pay the Registrar General's costs as assessed. It is appropriate that costs follow the event.

1. I make the following assessment of damages.

(a)   I assess damages in favour of the cross claimant on the second cross-claim in each proceedings, the Registrar General, in the sum of $1,410,000.

(b)   I assess interest on those damages in each proceedings in the sum of $112,568.22.

1. In each matter, I will make the following orders:

(1)   Assess damages in the sum of $1.41 M.

(2)   Assess interest on damages up to judgment in the sum of $112,568.22.

(3) Order that there be judgment in favour of Mrs Irena Feiner, pursuant to s 133(2) of the RealPropertyAct, against the cross-defendant, Edward Thomas Feiner, in the sum of $1,522,568.22.

(4)   Order in each matter that the cross-defendant, Edward Thomas Feiner, is to pay Registrar-General's costs of the proceedings as assessed or agreed.

1. I add the following note: I note that the judgment entered in proceedings 2011/251218 and proceedings 2012/241625 on 11 September 2014, relies upon the same underlying loss. Accordingly, the Registrar General of New South Wales is not entitled to recover more than the sum fixed by one of the judgments.

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Amendments

17 November 2014 - Renumbering

Amended paragraphs: 13

Decision last updated: 17 November 2014