ACN 077 991 890 Pty Limited & Ors v National Australia Bank Limited & Ors [2007] NSWSC 358

ACN 077 991 890 Pty Limited & Ors v National Australia Bank Limited & Ors [2007] NSWSC 358

Plaintiffs are entitled to marshal against the Norton securities and be subrogated to the rights of the Bank in respect of the mortgages up to the amount applied by the Bank in discharging the Nortons' debt ($629,044.44), because the exception to the common debtor rule applies and the Norton defendants cannot rely on unasserted rights of subrogation by the company to defeat the plaintiffs' claim.

Parties
First Plaintiff: ACN 077 991 890 Pty Ltd (formerly Known as Apollo Financial Services Pty Limited); Second Plaintiff: Harold Roderick Chase; Third Plaintiff: Glenda Isabel Chase; First Defendant: National Australia Bank Limited; Second Defendant: Reginald Terence Norton; Third Defendant: Margaret Anne Norton; Fourth Defendant: Norton-Ram Pty Ltd (in liquidation)
Jurisdiction
Australia
Judgment Date
19 April 2007
Procedural Posture
Equity Claim / Final Judgment
Outcome
Plaintiffs may marshal against rights of first defendant under mortgages given by the second and third defendant to the first defendant.
Legal Topics
Marshalling of Securities, Subrogation, Common Debtor Exception
Equity Mortgages Marshalling of Securities Subrogation Common Debtor Exception

Case Brief

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Parties

ACN 077 991 890 Pty Ltd (formerly Known as Apollo Financial Services Pty Limited)

First Plaintiff

Harold Roderick Chase

Second Plaintiff

Glenda Isabel Chase

Third Plaintiff

National Australia Bank Limited

First Defendant

Reginald Terence Norton

Second Defendant

Margaret Anne Norton

Third Defendant

Norton-Ram Pty Ltd (in liquidation)

Fourth Defendant

Procedural Posture

Equity Claim / Final Judgment

Legal Issues

  1. 1 Whether plaintiffs are entitled to marshal against the rights of the Bank under mortgages given by company directors to the Bank.
  2. 2 Whether exception to the common debtor rule applies in marshalling of securities.
  3. 3 Whether company directors can rely on company's rights of subrogation as a defence to marshalling claim.

Ratio Decidendi

Plaintiffs are entitled to marshal against the Norton securities and be subrogated to the rights of the Bank in respect of the mortgages up to the amount applied by the Bank in discharging the Nortons' debt ($629,044.44), because the exception to the common debtor rule applies and the Norton defendants cannot rely on unasserted rights of subrogation by the company to defeat the plaintiffs' claim.

Court Disposition

Plaintiffs may marshal against rights of first defendant under mortgages given by the second and third defendant to the first defendant.

Orders

  • Declare plaintiffs may marshal against and be subrogated to Bank's rights in mortgages over Parkes Land, Parkes Office, and Valentine Land up to NAB Recoveries or amount owing by Norton Ram to plaintiffs.
  • Declare sum recovered by Bank and applied to satisfaction of amounts owing by second and third defendants is $629,044.44.