MURPHY and ANOR v WRIGHT [1992] NSWCA 168

MURPHY and ANOR v WRIGHT [1992] NSWCA 168

Clause 12 of the Deed of Guarantee confers an option on the Lender, exercisable after default, to create an equitable charge over the Guarantor's Torrens title land by lodging a caveat, thus providing the Lender with security for the guaranteed debt.

Parties
Appellant: Murphy and Anor; Respondent: Wright
Jurisdiction
Australia
Judgment Date
19 October 1992
Procedural Posture
Appeal / Judgment
Outcome
Appeal allowed with costs (majority); orders below set aside; declaration made for equitable charge over property; caveat extended; proceedings remitted to Equity Division; respondent to pay costs; certificate under Suitors Fund Act granted.
Legal Topics
Guarantee, Equitable Charge, Option, Security Interest, Construction of Contract
Equity Contracts Guarantee Equitable Charge Option Security Interest Construction of Contract

Case Brief

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Parties

Murphy and Anor

Appellant

Wright

Respondent

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 Whether clause 12 of the Deed of Guarantee creates an equitable charge on the Guarantor's assets upon default
  2. 2 Whether ambiguous terms in the guarantee should be construed in favour of the guarantor
  3. 3 Interpretation of contractual option to attach debt to property

Ratio Decidendi

Clause 12 of the Deed of Guarantee confers an option on the Lender, exercisable after default, to create an equitable charge over the Guarantor's Torrens title land by lodging a caveat, thus providing the Lender with security for the guaranteed debt.

Court Disposition

Appeal allowed with costs (majority); orders below set aside; declaration made for equitable charge over property; caveat extended; proceedings remitted to Equity Division; respondent to pay costs; certificate under Suitors Fund Act granted.

Orders

  • Appeal allowed with costs.
  • Set aside the orders of Brownie J.