National Australia Bank Ltd v Clowes [2012] NSWSC 80

National Australia Bank Ltd v Clowes [2012] NSWSC 80

The peak performance facility and the Plain & Simple Home Loan were unsecured. The mortgage and charge over the Jefferson Pty Limited shares was limited to the reducible mortgage loan and was not an all moneys security; the later documents referred only to an inapt first registered mortgage over the flat, which Mr Clowes and Ms Moore could not grant; and the bank's retention of the share certificate after the reducible mortgage loan was discharged was unjustified and did not create an equitable mortgage. The bank was therefore not entitled to secured relief, but default was proved against Mr Clowes and judgment was entered against him for the outstanding debt.

Jurisdiction
Australia
Judgment Date
14 February 2012
Procedural Posture
Mortgage/security Proceedings Concerning Company Title Shares / Principal Judgment After Hearing
Outcome
Bank not secured; judgment entered against Michael Leo Clowes for $969,262.41 with costs; summons otherwise dismissed.
Legal Topics
['mortgage and Charge Over Shares' 'company Title Flats' 'equitable Mortgage by Deposit of Title Deeds' 'construction of Security Documents' 'default Judgment']
['mortgages' 'equity' 'banking and Finance' 'company Title Property'] ['mortgage and Charge Over Shares' 'company Title Flats' 'equitable Mortgage by Deposit of Title Deeds' 'construction of Security Documents' 'default Judgment']

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Procedural Posture

Mortgage/security Proceedings Concerning Company Title Shares / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether the mortgage and charge over the 9,000 Jefferson Pty Limited shares secured the peak performance equity mortgage facility and the Plain & Simple Home Loan.' 'Whether the description of the security as a first registered mortgage over 7/43 at the Double Bay address should be read as referring to the 9,000 shares in Jefferson Pty Limited.' 'Whether an equitable mortgage arose because the bank retained the share certificate after the reducible mortgage loan was paid out.' 'Whether the bank was entitled to relief on the basis that it was secured, including possession of 7/43 at the Double Bay address.']

Ratio Decidendi

The peak performance facility and the Plain & Simple Home Loan were unsecured. The mortgage and charge over the Jefferson Pty Limited shares was limited to the reducible mortgage loan and was not an all moneys security; the later documents referred only to an inapt first registered mortgage over the flat, which Mr Clowes and Ms Moore could not grant; and the bank's retention of the share certificate after the reducible mortgage loan was discharged was unjustified and did not create an equitable mortgage. The bank was therefore not entitled to secured relief, but default was proved against Mr Clowes and judgment was entered against him for the outstanding debt.

Court Disposition

Bank not secured; judgment entered against Michael Leo Clowes for $969,262.41 with costs; summons otherwise dismissed.

Orders

  • ['Judgment entered in the amount of $969,262.41 against Michael Leo Clowes.' "Michael Leo Clowes to pay the bank's costs." 'The summons is otherwise dismissed.' 'The exhibits are to be returned.']