Rathner (Liquidator), in the matter of PE Capital Nominees Pty Ltd (In Liq) v Runner Investment Limited [2023] FCA 754

Rathner (Liquidator), in the matter of PE Capital Nominees Pty Ltd (In Liq) v Runner Investment Limited [2023] FCA 754

Runner Investment Limited cannot rely on the Priority Deed as assignee of the first mortgage as it was not assigned the benefit, does not hold it on trust, is not a party within the meaning of the deed, nor does any relevant statute or equitable principle entitle it to enforce the deed's covenants. Mt Duneed Investments is entitled to exercise its power of sale under s 77 of the Transfer of Land Act 1958 (Vic) by discharging Runner's mortgage from sale proceeds, and the court would have granted orders to enable settlement and discharge absent subsequent developments. Further, the ongoing accrual of interest claimed by Runner should have ceased at the settlement date, as Runner's conduct...

Parties
First Plaintiff: Gideon Isaac Rathner and Matthew Brian Sweeny (as joint and several liquidators of PE Capital Nominees Pty Ltd (In Liq)); Second Plaintiff: PE Capital Nominees Pty Ltd (In Liquidation); First Defendant: Runner Investment Limited; Second Defendant: Mt Duneed Investments Pty Ltd; Third Defendant: Jasper Management Limited; Fourth Defendant: Oratango Pty Ltd; Second Cross Respondent of Second Cross Claim: Lance Adrian Godfrey Koch; Fifth Cross Respondent by Second Cross Claim: Manda Capital Holdings Pty Ltd
Jurisdiction
Australia
Judgment Date
05 July 2023
Procedural Posture
Cross Claims and Originating Application / Post Trial Judgment
Outcome
Second cross claim dismissed; further case management required due to developments post-hearing.
Legal Topics
Mortgages, Statutory Power of Sale, Priority Deeds, Corporate Insolvency, Trusts, Subordination and Priorities of Security Interests, Liquidator's Powers, Equitable Duties of Mortgagees, Discharge and Redemption of Mortgages
Corporations Property Law Equity Mortgages Statutory Power of Sale Priority Deeds Corporate Insolvency Trusts +4 more

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Parties

Gideon Isaac Rathner and Matthew Brian Sweeny (as joint and several liquidators of PE Capital Nominees Pty Ltd (In Liq))

First Plaintiff

PE Capital Nominees Pty Ltd (In Liquidation)

Second Plaintiff

Runner Investment Limited

First Defendant

Mt Duneed Investments Pty Ltd

Second Defendant

Jasper Management Limited

Third Defendant

Oratango Pty Ltd

Fourth Defendant

Lance Adrian Godfrey Koch

Second Cross Respondent of Second Cross Claim

Manda Capital Holdings Pty Ltd

Fifth Cross Respondent by Second Cross Claim

Procedural Posture

Cross Claims and Originating Application / Post Trial Judgment

Legal Issues

  1. 1 Whether Runner Investment Limited can enforce the Priority Deed against Mt Duneed Investments Pty Ltd as the assignee of the first mortgage
  2. 2 Whether the Priority Deed prevents Mt Duneed Investments from exercising its power of sale or from issuing a notice of default under s 76 of the Transfer of Land Act 1958 (Vic)
  3. 3 Whether Mt Duneed Investments can exercise its power of sale under s 77 of the Transfer of Land Act 1958 (Vic) and discharge Runner’s mortgage from sale proceeds

Ratio Decidendi

Runner Investment Limited cannot rely on the Priority Deed as assignee of the first mortgage as it was not assigned the benefit, does not hold it on trust, is not a party within the meaning of the deed, nor does any relevant statute or equitable principle entitle it to enforce the deed's covenants. Mt Duneed Investments is entitled to exercise its power of sale under s 77 of the Transfer of Land Act 1958 (Vic) by discharging Runner's mortgage from sale proceeds, and the court would have granted orders to enable settlement and discharge absent subsequent developments. Further, the ongoing accrual of interest claimed by Runner should have ceased at the settlement date, as Runner's conduct...

Court Disposition

Second cross claim dismissed; further case management required due to developments post-hearing.

Orders

  • The second cross claim dated 16 December 2021 be dismissed.
  • The proceeding and the second defendant's interlocutory process be listed for case management and interlocutory hearing at 4:15pm on 6 July 2023.