Naxatu Pty Limited v Perpetual Trustee Company Limited; In the Matter of Sterling Estates Development Corporation Pty Limited (Receivers and Managers Appointed) (Subject to a Deed of Company Arrangement) [2011] FCA 669

Naxatu Pty Limited v Perpetual Trustee Company Limited; In the Matter of Sterling Estates Development Corporation Pty Limited (Receivers and Managers Appointed) (Subject to a Deed of Company Arrangement) [2011] FCA 669

Perpetual properly construed and acted under its mortgages and the Deed of Priority; the Deed operates contractually to regulate priorities between Perpetual and Bridgecorp and does not affect Naxatu’s rights as second mortgagee; Naxatu has no basis for an inquiry under s 423 Corporations Act as it failed to establish Perpetual had been overpaid or acted improperly; the requirements for marshalling do not entitle Naxatu to relief against Perpetual; Perpetual’s approach to GST was neither unreasonable nor in bad faith.

Parties
Plaintiff/third Cross Defendant/second Defendant: Naxatu Pty Limited (ACN 002 197 131); First Defendant/second Cross Defendant/plaintiff: Perpetual Trustee Company Limited (ACN 000 001 007); Second Defendant/cross Claimant/first Defendant: Bridgecorp Finance Limited (Receiver and Manager Appointed) (In Liquidation) (ACN 095 328 948); First Cross Defendant: Permanent Trustee Australia Limited (ACN 008 412 913)
Jurisdiction
Australia
Judgment Date
10 June 2011
Procedural Posture
Civil / Judgment After Hearing at First Instance
Outcome
Proceedings dismissed; Cross-Claim dismissed; specified costs orders made.
Legal Topics
Mortgages, Priority of Securities, Deed of Priority, Power of Sale, Accounting by Mortgagee, Receivership, Section 423 Corporations Act Inquiry, Application of GST Margin Scheme
Property Law Corporations Law Mortgages Priority of Securities Deed of Priority Power of Sale Accounting by Mortgagee Receivership +2 more

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Parties

Naxatu Pty Limited (ACN 002 197 131)

Plaintiff/third Cross Defendant/second Defendant

Perpetual Trustee Company Limited (ACN 000 001 007)

First Defendant/second Cross Defendant/plaintiff

Bridgecorp Finance Limited (Receiver and Manager Appointed) (In Liquidation) (ACN 095 328 948)

Second Defendant/cross Claimant/first Defendant

Permanent Trustee Australia Limited (ACN 008 412 913)

First Cross Defendant

Procedural Posture

Civil / Judgment After Hearing at First Instance

Legal Issues

  1. 1 Whether Perpetual as first mortgagee had discharged its obligations to Naxatu or was required to provide discharges over the relevant securities;
  2. 2 Interpretation and effect of the Deed of Priority and its impact on Naxatu's position;
  3. 3 Obligation and rights of Perpetual in the application of funds from sales—especially regarding the interests of second mortgagees and marshalling;

Ratio Decidendi

Perpetual properly construed and acted under its mortgages and the Deed of Priority; the Deed operates contractually to regulate priorities between Perpetual and Bridgecorp and does not affect Naxatu’s rights as second mortgagee; Naxatu has no basis for an inquiry under s 423 Corporations Act as it failed to establish Perpetual had been overpaid or acted improperly; the requirements for marshalling do not entitle Naxatu to relief against Perpetual; Perpetual’s approach to GST was neither unreasonable nor in bad faith.

Court Disposition

Proceedings dismissed; Cross-Claim dismissed; specified costs orders made.

Orders

  • The proceeding be dismissed.
  • Naxatu Pty Limited to pay costs of Perpetual Trustee Company Limited incidental to this proceeding.