Marcel Esber v Kimberley Securities Limited [2009] NSWSC 1422

Marcel Esber v Kimberley Securities Limited [2009] NSWSC 1422

Kimberley had no money owing to it under the unregistered third mortgages and therefore had no beneficial entitlement or intervening equitable interest in the disputed surplus. Payment by the second defendant to Kimberley was not "in payment of" a subsequent mortgage within s 58(3) and was inconsistent with the second defendant's equitable obligations as mortgagee holding surplus funds for the persons beneficially entitled. The second defendant's breach was complete when it paid the trust fund to Kimberley under an indemnity rather than paying the entitled parties or protecting itself by payment into court or interpleader.

Jurisdiction
Australia
Judgment Date
16 December 2009
Procedural Posture
Equity Division Commercial List Principal Judgment Concerning Surplus Proceeds After Mortgagee Sale of Torrens Title Land / Judgment After Hearing
Outcome
Judgment for the first and third plaintiffs against the second defendant.
Legal Topics
['real Property Act 1900 (nsw) S 58(3)' 'mortgagee Power of Sale' 'application of Surplus Sale Proceeds' 'registered and Unregistered Mortgages' 'equitable Mortgage' 'fiduciary Duty of Mortgagee Holding Surplus' 'equitable Compensation']
['real Property' 'equity'] ['real Property Act 1900 (nsw) S 58(3)' 'mortgagee Power of Sale' 'application of Surplus Sale Proceeds' 'registered and Unregistered Mortgages' 'equitable Mortgage' 'fiduciary Duty of Mortgagee Holding Surplus' 'equitable Compensation']

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Procedural Posture

Equity Division Commercial List Principal Judgment Concerning Surplus Proceeds After Mortgagee Sale of Torrens Title Land / Judgment After Hearing

Legal Issues

  1. 1 ['Whether the reference to "subsequent mortgages" in s 58(3) of the Real Property Act 1900 (NSW) is restricted to subsequent registered mortgages.' 'Whether payment to an unregistered third mortgagee was "in payment of" a subsequent mortgage where no money was actually owing under that mortgage.' 'Whether the second defendant breached its statutory or equitable obligations by paying the surplus to Kimberley under an indemnity instead of to the Esbers or into court.' 'What compensation should be awarded to the Esbers.']

Ratio Decidendi

Kimberley had no money owing to it under the unregistered third mortgages and therefore had no beneficial entitlement or intervening equitable interest in the disputed surplus. Payment by the second defendant to Kimberley was not "in payment of" a subsequent mortgage within s 58(3) and was inconsistent with the second defendant's equitable obligations as mortgagee holding surplus funds for the persons beneficially entitled. The second defendant's breach was complete when it paid the trust fund to Kimberley under an indemnity rather than paying the entitled parties or protecting itself by payment into court or interpleader.

Court Disposition

Judgment for the first and third plaintiffs against the second defendant.

Orders

  • ['Judgment for the Esbers in the amount of $416,780.81.' 'Interest to be calculated from 28 February 2002.' 'The Esbers are to recover an amount to be determined as representing the costs properly and reasonably incurred in their unsuccessful pursuit of Kimberley.' "The judgment amount is to be reduced by $60.50 for...