Austin & Anor v Royal & Ors [1999] NSWCA 222

Austin & Anor v Royal & Ors [1999] NSWCA 222

The appeal failed because the debtor's obligations secured by the mortgage debenture had not been paid or discharged in full. The receiver and the bank continued properly to incur costs and face liabilities under the mortgage debenture and related litigation, so the security remained enforceable for the bank's benefit. Any subrogation claim by the guarantors would therefore compete with the secured creditor's continuing rights and had not yet arisen.

Jurisdiction
Australia
Judgment Date
10 June 1999
Procedural Posture
Appeal in a Guarantee and Indemnity Matter / Appeal From Judgment of Giles CJ Comm D in the Supreme Court Commercial Division
Outcome
Appeal dismissed with costs
Legal Topics
['subrogation' 'suretyship' 'mortgage Debenture' 'continuing Secured Obligations' 'receivership Costs']
['equity' 'banking and Finance' 'guarantees and Indemnities'] ['subrogation' 'suretyship' 'mortgage Debenture' 'continuing Secured Obligations' 'receivership Costs']

Case Brief

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Procedural Posture

Appeal in a Guarantee and Indemnity Matter / Appeal From Judgment of Giles CJ Comm D in the Supreme Court Commercial Division

Legal Issues

  1. 1 ["Whether guarantors who made a partial payment to the bank were entitled to be subrogated to the bank's securities before all obligations secured by the mortgage debenture were fully discharged." 'Whether clause 12 of the guarantee excluded any right of subrogation.' 'Whether s.3 of the Law Reform (Miscellaneous Provisions) Act 1965 applied despite the terms of the guarantee.']

Ratio Decidendi

The appeal failed because the debtor's obligations secured by the mortgage debenture had not been paid or discharged in full. The receiver and the bank continued properly to incur costs and face liabilities under the mortgage debenture and related litigation, so the security remained enforceable for the bank's benefit. Any subrogation claim by the guarantors would therefore compete with the secured creditor's continuing rights and had not yet arisen.

Court Disposition

Appeal dismissed with costs

Orders

  • ['The appeal is dismissed with costs.']