Kathleen Jeanne Furlong & Mark Andrew Leishman (a bankrupt) v Wise & Young Pty Ltd, Defined Properties Investment Pty Ltd & Wyse and Young International Pty Ltd; Wise & Young Pty Ltd, Defined Properties Investment Pty Ltd & Wyse and Young International Pty Ltd v Kathleen Jeanne Furlong, Gilbert Innes Leishman, Design by Kaka Pty Ltd as trustee for Kathleen Leishman Investment Trust, GIM Investments (ncle) Pty Ltd as trustee for Kathleen Leishman Investment Trust & Kim Magella Leishman; Gilbert Innes Leishman v Defined Properties Investment Pty Ltd, Wise & Young Pty Ltd, Wise & Young International Pty Ltd, George Dimitriou and Bramco Group International Pty Ltd [2016] NSWSC 1839

Kathleen Jeanne Furlong & Mark Andrew Leishman (a bankrupt) v Wise & Young Pty Ltd, Defined Properties Investment Pty Ltd & Wyse and Young International Pty Ltd; Wise & Young Pty Ltd, Defined Properties Investment Pty Ltd & Wyse and Young International Pty Ltd v Kathleen Jeanne Furlong, Gilbert Innes Leishman, Design by Kaka Pty Ltd as trustee for Kathleen Leishman Investment Trust, GIM Investments (ncle) Pty Ltd as trustee for Kathleen Leishman Investment Trust & Kim Magella Leishman; Gilbert Innes Leishman v Defined Properties Investment Pty Ltd, Wise & Young Pty Ltd, Wise & Young International Pty Ltd, George Dimitriou and Bramco Group International Pty Ltd [2016] NSWSC 1839

The mortgage documents purporting to secure the property in favour of Wise & Young were found to be forgeries and void, however the plaintiffs knew and accepted Wise & Young advanced funds to discharge their prior mortgage, intending to grant a mortgage in return. Accordingly, an equitable mortgage arose by conduct, and Wise & Young retains a caveatable interest over the property. However, the caveat supported solely by uncertain cost agreements (AJ876906H) must be removed as no debt or proprietary interest was proven. DPI, acting as trustee for Bramco trading funds, commingled those funds, breached trust obligations, and bore the onus to account; quantification of any breach is referred...

Jurisdiction
Australia
Judgment Date
16 December 2016
Procedural Posture
Principal Judgment / Final Decision With Referral of Trust Breach Quantification to Referee
Outcome
Equitable mortgage and caveatable interest in favour of Wise & Young upheld; forged mortgage documents voided; caveat AJ876906H ordered removed; DPI found in breach of trust with quantum to be determined by referee; no relief under Competition and Consumer Act granted; parties to be heard on further orders and costs.
Legal Topics
['equitable Mortgages' 'subrogation' 'interest in Equity' 'caveatable Interests' 'trusts' 'misappropriation of Trust Funds' 'accessorial Liability' 'quantum Meruit' 'removal of Caveats' 'judicial Assessment of Evidence' 'failure to Cross Examine' 'misleading and Deceptive Conduct']
['equity' 'real Property' 'practice and Procedure'] ['equitable Mortgages' 'subrogation' 'interest in Equity' 'caveatable Interests' 'trusts' 'misappropriation of Trust Funds' 'accessorial Liability' 'quantum Meruit' 'removal of Caveats' 'judicial Assessment of Evidence' 'failure to Cross Examine' 'misleading and Deceptive Conduct']

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Procedural Posture

Principal Judgment / Final Decision With Referral of Trust Breach Quantification to Referee

Legal Issues

  1. 1 ['Whether the defendants have a caveatable interest in the property at 24 Memorial Drive, The Hill, NSW under certain cost agreements and mortgages; Whether alleged mortgage documents were forged; Whether funds used to discharge a mortgage were provided by the defendants or third parties; Whether defendants are entitled to quantum meruit or fees; Whether funds held in trust by DPI were misappropriated; Whether removal of caveats was warranted; Whether any breach of Competition and Consumer Act 2010 (Cth) occurred.']

Ratio Decidendi

The mortgage documents purporting to secure the property in favour of Wise & Young were found to be forgeries and void, however the plaintiffs knew and accepted Wise & Young advanced funds to discharge their prior mortgage, intending to grant a mortgage in return. Accordingly, an equitable mortgage arose by conduct, and Wise & Young retains a caveatable interest over the property. However, the caveat supported solely by uncertain cost agreements (AJ876906H) must be removed as no debt or proprietary interest was proven. DPI, acting as trustee for Bramco trading funds, commingled those funds, breached trust obligations, and bore the onus to account; quantification of any breach is referred...

Court Disposition

Equitable mortgage and caveatable interest in favour of Wise & Young upheld; forged mortgage documents voided; caveat AJ876906H ordered removed; DPI found in breach of trust with quantum to be determined by referee; no relief under Competition and Consumer Act granted; parties to be heard on further orders and costs.

Orders

  • ['Caveat AJ876904M (in favour of Wise & Young) to stand as supporting an equitable mortgage.' 'Caveat AJ876906H (based on cost agreement) to be removed.' "Quantum of any trust misapplication by DPI referred to a referee under Uniform Civil Procedure Rules 2005 (NSW) Part 20, Division 3, with parties to bear...