Bank of New South Wales v Permanent Trustee Company of New South Wales Limited [1943] HCA 27

Bank of New South Wales v Permanent Trustee Company of New South Wales Limited [1943] HCA 27

Liability on the personal covenant in a mortgage, where the mortgage was given by a guarantor to secure payment of a debt originally owed under a guarantee, is not revived by the Moratorium Act 1932-1936 (NSW). The relevant statutory provisions restored remedies only against guarantors 'simpliciter', but not where the liability is sought to be enforced via the mortgagor's covenant in the mortgage itself, which remains void under s.25(7).

Parties
Appellant, Plaintiff: Bank of New South Wales; Defendant, Respondent: Permanent Trustee Company of New South Wales Ltd.
Jurisdiction
Australia
Procedural Posture
Appeal / On Appeal From the Supreme Court of New South Wales (full Court)
Outcome
appeal dismissed
Legal Topics
Guarantee, Mortgage, Moratorium Legislation, Personal Covenant, Statutory Interpretation, Liability Under Mortgage
Contract Law Property Law Guarantee Mortgage Moratorium Legislation Personal Covenant Statutory Interpretation Liability Under Mortgage

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Parties

Bank of New South Wales

Appellant, Plaintiff

Permanent Trustee Company of New South Wales Ltd.

Defendant, Respondent

Procedural Posture

Appeal / On Appeal From the Supreme Court of New South Wales (full Court)

Legal Issues

  1. 1 Whether the personal covenant in a mortgage given to secure moneys originally owing under a guarantee, executed after the guarantee, is enforceable in light of the Moratorium Acts (NSW) 1930-1936.
  2. 2 Whether the Moratorium Act 1932-1936 (NSW) revived liability on such personal covenants previously rendered void by s. 25(7) of the Moratorium Act 1930-1931 (NSW).

Ratio Decidendi

Liability on the personal covenant in a mortgage, where the mortgage was given by a guarantor to secure payment of a debt originally owed under a guarantee, is not revived by the Moratorium Act 1932-1936 (NSW). The relevant statutory provisions restored remedies only against guarantors 'simpliciter', but not where the liability is sought to be enforced via the mortgagor's covenant in the mortgage itself, which remains void under s.25(7).

Court Disposition

appeal dismissed

Orders

  • Appeal dismissed with costs.