Hypec Electronics Pty Ltd (In Liq) v Registrar-General

Conveyancing Act 1919 s 96(2) Conveyancing and Law of Property Act 1881 (UK) s 16 Law of Property Act 1925 (UK) s 96 Property Law Act 1958 (Vic) s 96 LEGISLATION CITED : Property Law Act 1974 (Qld) s 80 Real Property Act 1900 s 138 Transfer of Land Act 1890 (Vic) s 134 Transfer of Land Act 1958 (Vic) s 86 Transfer of Land Act 1893 (WA) s 127

Alliance Acceptance Co Ltd v Ellison (1986) 5 NSWLR 102 Anthony v Speed [1917] SALR 111 Bank of New South Wales v O'Connor (1889) 14 App Cas 273 Bismark Range (Lucknow) Gold Exploration NL v Wentworth (Lucknow) Gold Fields NL (1935) 35 SR (NSW) 400 Brunker v Perpetual Trustee Co (Ltd) (1937) 57 CLR 555 C J Burland Pty Ltd v Metropolitan Meat Industry Board (1968) 120 CLR 400 Chichester v Marquis of Donegall (1870) LR 5 Ch App 497 Clissold v Perry (1904) 1 CLR 363 Corin v Patton (1990) 169 CLR 540 Costin v Costin (1994) NSW ConvR 55-715 Finlay v R & I Bank of Western Australia Ltd (1993) 6 BPR 13,242 Holley v Metropolitan Building Society [1983] 2 QdR 786 Hypec Electronics Pty Limited (in liq) v Mead [2003] NSWSC 934 Hypec Electronics Pty Ltd (In Liq) v Registrar-General [2005] NSWSC 1056 Hypec Electronics Pty Ltd v Mead [2004] NSWCA 221 In re Armitage; ex parte Andrews (1981) 27 VLR 77 J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1969) 90 WN (Pt 1) (NSW) 571 Metropolitan Petar v Mitreski [2003] NSWSC 262 CASES CITED : Mitrovic v Koren [1971] VR 479 Motor Auction Pty Ltd v John Joyce Wholesale Cars Pty Ltd (1997) 138 FLR 118 Nia v Phuong (1993) 6 BPR 13,141 St Kilda Road Pty Ltd v Parker Simmonds Securities Limited (2002) V ConvR 54-652 Wade v New South Wales Rutile Mining Co Pty Ltd (1970) 121 CLR 177 32 Halsbury (4th ed 1999) tit Mortgage par 693 Duncan and Vann, Property Law and Practice at para 80.8 Duncan and Wallace, Property Law and Practice (2003) at [7.500] E A Francis, Mortgages and Securities (2nd ed, 1975) at 35; (3rd ed, 1986) at 42 E A Francis, Torrens Title in Australasia (1972) at 410 E L G Tyler, P W Young and C E Croft, Fisher and Lightwood's Law of Mortgage (Aust ed, 1995) [3.30] G P Stuckey, The Conveyancing Act, 1919 - 1969 (2nd ed, 1970) 208 - 209 P W Young and ors, 2 Conveyancing Service New South Wales [35102] at 3512 Pearce and Geddes, Statutory Interpretation in Australia (5th ed, 2001) [5.15] - [5.17] Peter Butt, Land Law (2001) at [18135] Peter Butt, Note in (2002) 76 ALJ 478 Queensland Report of the Law Reform Commission re Property Law Reform QLRC 16 (1973) R J Vann, "The Mortgagor's 'Rights' of Inspection and Production of Title Documents," Law Society Journal, Feb 1980, at 34

Hypec Electronics Pty Limited (In Liquidation) (P) Registrar-General of the Department of Lands (D1) Colin Anthony Mead (D2) PARTIES : Lucy Guitar Mead (D3) Mei Chen Yang (D4) Lee Chin-Lien Yang (D5) Wen Hua Tsui (D6)

P B Walsh (P) Submitting appearance (D1) COUNSEL : V M Dominello, Solicitor (D2) In person (D3) G A Moore (D6)

Deacons (P) K C Hall (D1) Etheringtons (D2) SOLICITORS : D Riggio & Associates (D3) No appearance (D4 & 5) Dennis Wong & Co (D6)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4413/05 HYPEC ELECTRONICS PTY LTD (In Liq) v REGISTRAR-GENERAL JUDGMENT ISSUE 1 HIS HONOUR: In these proceedings the outstanding claim made by the plaintiff is, in terms, for an order under s 96(2) of the Conveyancing Act 1919 ("the CA") that the mortgagee produce to the Registrar General the copy certificates of title held by her to permit registration of transfers of the fee simple in two properties. 2 The issue for decision is whether those transfers are "authorised dealings" within the meaning of that subsection, so as to create an entitlement to have the copy certificates of title produced. FACTS 3 The issue arises in the following way. In Hypec Electronics Pty Limited (in liq) v Mead [2003] NSWSC 934 Campbell J (relevantly) declared that each of three properties was held by its registered proprietors upon trust as to the whole of the interest of the registered proprietors for the plaintiff and ordered that the registered proprietors execute transfers of their respective interests in those properties to the plaintiff. Those orders were confirmed in the Court of Appeal: Hypec Electronics Pty Ltd v Mead [2004] NSWCA 221. The transfers have been executed, but their effectuation has been impeded by the absence of the relevant copy certificates of title. In these proceedings, the plaintiff sought an order that the Registrar General issue new certificates of title to the three properties under s 138 of the Real Property Act 1900 ("the RPA"). In relation to one property, the certificate of title to which could not be located, I made, by consent of the relevant defendants, an order for the issue of a new certificate of title: Hypec Electronics Pty Ltd (In Liq) v Registrar-General [2005] NSWSC 1056 ("my judgment"). It was established that the certificates of title to the other two properties were in the possession of the sixth defendant. This was not surprising, since she is the holder of a mortgage over each of those two properties. It may be that, in my judgment, it would have been more fortunate, rather than to say that the Court could not make such an order (see [5] of my judgment), to say that it would not make such an order, in a case where the location of the certificates of title was known. In any event, in relation to those two properties, the order was refused and I continue of the view that it was rightly refused. 4 Mr Peter Walsh, of counsel for the plaintiff, before the delivery of my judgment, submitted that the transfers of those two properties are "authorised dealings", because they are transfers executed under the order of the Supreme Court. But he was not ready on that occasion to argue fully his case for the order that he sought, avowedly pursuant to s 96(2), in the face of doubts which I expressed as to whether the transfers were authorised dealings within the meaning of the subsection. Also, at that time, the sixth defendant was not legally represented and sought the opportunity to have representation on the argument. 5 The sixth defendant became the holder of the relevant mortgages by acquiring them from the Commonwealth Bank of Australia. Each of the mortgages incorporates Memorandum No E212677 filed in the Land Titles Office. That memorandum provides in cl 5.2(a): "The Mortgagor will not without the consent in writing of the Mortgagee (which consent may be subject to such terms and conditions as the Mortgagee thinks fit): (a) Transfer, convey, sell, assign, surrender or create any Security Interest in or over or otherwise deal with or dispose of any part of the Mortgaged Property."

The sixth defendant has refused to produce the certificates of title to the Registrar General despite requests. LAW 6 As I have said, the central issue in this matter is whether the transfers that the plaintiff seeks to have registered are "authorised dealings" within the meaning of s 96(2) of the CA. Although that provision has been in the CA since its inception in 1919 there has been no authoritative judicial determination of its meaning. Section 96 relevantly provides as follows: "(1) A mortgagor, as long as the mortgagor's right to redeem subsists, shall by virtue of this Act be entitled from time to time at reasonable times on the mortgagor's request, and at the mortgagor's own cost and on payment of the mortgagee's costs and expenses in this behalf by the mortgagee, the mortgagee's solicitor or licensed conveyancer, to inspect and to be supplied with copies or abstracts of, or extracts from, the documents of title or other documents relating to the mortgaged property in the custody or power of the mortgagee.

(2) This section applies to mortgages under the Real Property Act 1900, and in such case the mortgagor shall be entitled to have the relevant certificate of title, or other document of title, lodged at the office of the Registrar-General, to allow of the registration of any authorised dealing by the mortgagor with the land, upon payment of the mortgagee's proper costs and expenses.

(3) This section applies only to mortgages made after the commencement of this Act, and shall have effect notwithstanding any stipulation to the contrary."

Section 7(1) of the CA contains the following relevant definitions: "Mortgage, mortgagee , and mortgagor in relation to land under the provisions of the Real Property Act, 1900, have the same meaning as in that Act.

Mortgagor includes any person from time to time deriving title to the equity of redemption under the original mortgagor, or entitled to redeem a mortgage according to the person's estate, interest or right in the mortgaged property."

Section 3(1)(a) of the RPA contains the following relevant definitions: " Mortgage -- Any charge on land (other than a covenant charge) created merely for securing the payment of a debt.

Mortgagor -- The proprietor of land or any estate or interest in land pledged as security for the payment of a debt.

Proprietor -- Any person seised or possessed of any freehold or other estate or interest in land at law or in equity in possession in futurity or expectancy."

The plaintiff is a mortgagor for the purposes of s 96 of the CA. That is because, pursuant to the orders made by Campbell J, the plaintiff is the beneficial owner of each of the two relevant properties and so a mortgagor within the meaning of s 3 of the RPA. 7 The provisions in other States concerning the same subject matter are by no means uniform with the provisions in New South Wales. To understand the significance of the limited authority on this issue, it is necessary to set out the relevant Queensland provisions, which are contained in s 80 of the Property Law Act 1974 (Qld). "80 Inspection and production of instruments

(1) A mortgagor, as long as the mortgagor's right to redeem subsists, shall because of this Act be entitled from time to time at reasonable times on the mortgagor's request and at the mortgagor's own cost and on payment or tender of the mortgagee's proper costs and expenses in that behalf, by the mortgagor or the mortgagor's solicitor or conveyancer, to inspect and to make or be supplied with copies or abstracts of, or extracts from, the documents of title or other documents relating to the mortgaged property in the possession, custody or power of the mortgagee.

(2) Subject to any other Act, where in the case of a mortgage of land the mortgagor executes any instrument or other document subsequent to that mortgage in relation to - (a) any authorised dealing with the land; or

the mortgagee or other person holding the relevant certificate of title, instrument of lease or other documents of title shall - (c) upon being requested in writing so to do by the mortgagor or a person entitled to the benefit of the subsequent instrument or document; and

(d) at the cost of the person making that request; and

(e) upon payment or tender to that mortgagee or other person of the person's proper costs and expenses in that behalf;

produce the document or documents of title for lodgment in the land registry so that the subsequent instrument or document may be registered.

(2A) If the mortgagee or other person refuses or neglects to comply with a request made under subsection (2), the mortgagor or person entitled to the benefit of the subsequent instrument or document concerned may make application to a judge of the Supreme Court in chambers for an order directed to that mortgagee or other person to show cause why the document or documents of title should not be produced under subsection (2).

(2B) If the mortgagee or other person neglects or refuses to attend before the judge of the Supreme Court in chambers at the time appointed in the order, the judge may issue a warrant authorising and directing some person to be named in the warrant to apprehend and arrest the person so ordered to show cause and bring the person before a judge of the Supreme Court in chambers for examination.

(2C) Upon the appearance before the judge of any person under subsection (2A) or (2B) and after examining that person upon oath the judge may - (a) order that person to deliver up the document or documents of title; or

(b) order the registrar or warden to dispense with production of the document or documents of title to enable the subsequent instrument or document to be registered.

(3) A certificate of title, instrument of lease, or other document of title lodged in terms of subsection (2) - (a) shall, when the dealing or mortgage referred to in that subsection has been registered, be redelivered to the mortgagee or other person authorised by the mortgagee to take delivery of the dealing or mortgage; and

(b) shall not whilst so lodged, be used or available for the purpose of registering any instrument, dealing, or mortgage other than those referred to in subsection (2).

(4) The execution or attempted execution of a second or subsequent mortgage shall not - (a) constitute a breach of any term, covenant, condition or proviso for re-entry contained in the mortgage; or

(c) render payable or accelerate the time for payment of any sum or sums which, if such mortgage had not been executed or if the attempt to execute such mortgage had not been made, would not have been payable or would not have been payable at that time." 8 It should be noted that this section differs from the New South Wales provision by the inclusion of sub s (4), abrogating the right of a first mortgagee to forbid the giving or registration of a second mortgage and sub ss (2A), (2B) and (2C), conferring a power on the Court to order production of certificates of title and, indeed, a draconian power authorising the peremptory arrest and questioning of an uncooperative mortgagee. 9 It is also necessary, for the same reason, to set out the Victorian provisions corresponding with CA s 96. These are divided between two Acts. The provision which corresponds with s 96(1) is s 96 of the Property Law Act 1958 (Vic), which is as follows: "96 Mortgagor entitled to inspection and copies of documents relating to mortgaged property

A mortgagor, as long as his right to redeem subsists, shall be entitled from time to time, at reasonable times, on his request, and at his own cost, and on payment of the mortgagee's costs and expenses in this behalf, by himself or his legal practitioner to inspect and make copies or abstracts of or extracts from the documents of title relating to the mortgaged property in the custody or power of the mortgagee.

This section shall have effect notwithstanding any stipulations to the contrary." 10 The provision which corresponds with s 96(2) is s 86 of the Transfer of Land Act 1958 (Vic), which is as follows: "86 First mortgagee to produce title for registration of subsequent instrument

When any instrument subsequent to a first mortgage is made by the registered proprietor of any land and such proprietor or the person entitled to the benefit of the subsequent instrument desires the registration of the subsequent instrument the first mortgagee if he holds the certificate of title concerned shall, upon being requested so to do by the proprietor or person entitled as aforesaid but at the cost of the person making such request, produce such certificate of title to the Registrar."

In this provision "instrument" is not qualified by the word "authorised". It should be said that, in Victoria, a provision virtually in this form has been in force since the inclusion of s 134 in the Transfer of Land Act 1890. 11 Corresponding to s 86 above, the Western Australian Transfer of Land Act 1893 has contained since its inception a s 127 in the following form almost identical with the Victorian provision: "127 First mortgagee to produce title for registration of subsequent instrument

When any instrument subsequent to a first mortgage is made by the proprietor of any land and such proprietor or the person entitled to the benefit of such subsequent instrument desires the registration of such subsequent instrument the first mortgagee should he hold the duplicate certificate of title which comprises the land in such subsequent instrument shall upon being requested so to do by the proprietor of the land or the person entitled to the benefit of such subsequent instrument but at the cost of the person making such request produce such duplicate certificate of title to the Registrar so that such subsequent instrument may be registered." 12 There has been some general discussion of s 96(2) of the CA in the High Court. The cases have concerned whether or not production of a copy certificate of title could be compelled to permit the perfection of a transfer by way of gift. In Brunker v Perpetual Trustee Co (Ltd) (1937) 57 CLR 555 Dixon J, as his Honour then was, said at 599 - 600: "An intended donee cannot stand in such a position. Being a volunteer, an intended donee cannot obtain equitable remedies against the donor compelling him to give legal effect to his intention to give. The deceased manifested no intention to constitute himself a trustee of the land for the appellant, and the memorandum of transfer is not, and cannot produce the effect of, a declaration of trust. The appellant is, therefore, the owner of neither a legal nor an equitable estate in the land. But, under the system of the Real Property Act, a transferee may be in a position by registering an instrument to obtain a legal estate, although prior to registration neither the legal nor any equitable estate was vested in him. If that system allows a volunteer to acquire an indefeasible right to the registration of an instrument in his favour, then, although it would remain true that before registration he had neither a legal nor an equitable estate in the land, yet he would be entitled to a right of a new description arising under the statute, and by its exercise he could vest the legal estate in himself.

The true question in the present case appears to me to be whether the appellant acquired a right of this nature which the deceased or his executor could not intercept or defeat. There is no a priori reason why statutory provisions making title depend upon registration should not confer upon a person in whose favour a registrable instrument has been made, a right to procure its registration, notwithstanding that it is voluntary, and no reason why it should not leave the transferor powerless to countermand his instrument. Such a right would not depend upon the doctrines or remedies of a court of equity, and, pending actual registration, the transferee could not be considered entitled to an equitable interest any more than to a legal interest in the land. It might appear anomalous, but the anomaly would be no obstacle to the existence of the right. Under other Torrens statutes this question has arisen and the weight of judicial opinion appears to concede that under the system a transferee in possession of a voluntary transfer may become entitled to register the transfer, notwithstanding that the transferor seeks to prevent it. Sir John Salmond seems to have been unready to make this concession ( Public Trustee v Commissioner of Stamp Duties [ 1925] NZLR 237 , at pp 239, 240) and Herdman J has refused to do so ( Scoones v Galvin [1934] NZLR, at p 1022). But, if such a right can be conferred at all, it seems to be agreed that to impart it more is required than the mere execution of the transfer by the donor." 13 In Corin v Patton (1990) 169 CLR 540 at 561 Mason CJ and McHugh J said: "The section is of no assistance to the appellants. Mr Corin was not a person entitled to redeem the mortgage unless and until there had been a transfer of Mrs Patton's interest. Further, sub-s (2) concerns the entitlement to the certificate of title of a mortgagor seeking registration of any authorized dealing by that mortgagor, that is, in this case, Mrs Patton. Although she could, in relation to an authorized dealing, have compelled production of the certificate of title, Mr Corin could not: Brunker (1937) 57 CLR, at p 604.

Accordingly, the transactions failed to pass the equitable property in the land to Mr Corin, and it is unnecessary to consider under whose control the instrument of transfer was after execution. Further, because the gift was incomplete, Mrs Patton could have recalled the transfer at any time. But it is not strictly relevant to ask whether or not Mrs Patton could have recalled the gift; that is not a criterion but rather a result of the efficacy or otherwise of the gift." 14 These passages show the general approach of the High Court to the section, but are not of any great assistance in determining the issue in this case as to the meaning of "authorised dealing". 15 The debate as to the meaning of "authorised dealing" in s 96(2) has generally turned on a contest between two versions. The first version is to the effect that an "authorised dealing" means a dealing authorised under the Torrens system of land transactions, ie, as virtually equivalent in meaning to a registrable dealing. The second version is that an "authorised dealing" means a dealing which is, if not expressly authorised by the relevant mortgage instrument, then at least not forbidden by it. 16 In Queensland, the view has been taken that production of a certificate of title by a mortgagee would not be compelled in order to permit registration of a transfer of the fee simple. In Victoria, the production of the certificate of title by a first mortgagee has been compelled in order to permit registration of a second mortgage, even where the giving or registration of a second mortgage was forbidden by the first mortgage. 17 In Queensland, in Holley v Metropolitan Building Society [1983] 2 QdR 786, Derrington J discussed the meaning of s 80 set out above. It should be noted that sub ss (2A), (2B) and (2C) were not in the section at that time, but were inserted in 1985. His Honour said at 788 - 789: "The plaintiff's claim is founded upon s 80(2) of the Act. The issue is essentially dependant upon the construction of the words 'any authorized dealing' in sub-paragraph (a) of that subsection. The plaintiff argues that the term refers to dealings authorized by the system of title in question, in this case the Real Property Acts, but subject to no other limitation. The defendant argues that the term means dealings authorized under the terms of the mortgage subject only to any express statutory authorization that may exist overriding this limitation.

The plaintiff relies on the arguments set out in Duncan and Vann on Property Law and Practice para 80.8, adopting and extending the view of the author of Francis on Mortgages and Securities 2nd ed pp 35 - 6 in relation to the position in New South Wales. However, the Queensland section is notably different from that of New South Wales, and more so in respect of the corresponding English and Victorian sections. I do not agree with the proposition in Duncan and Vann, adopted by the plaintiff, that the purpose of the subsection overall is to facilitate dealings by the mortgagor with his interest without the mortgagee's consent. That appears to beg the question except insofar as it applies to dealings by way of a second or subsequent mortgage; and in any case that facilitation is really contained in subsec (4). Any facilitation by subsec (2) relates to dealings otherwise authorised, whether by the mortgage or the section itself.

It is to be noted that the Real Property Acts refer to authorised dealings, and derivative terms, but, apart from taking that into account in the general weighing of counterveiling factors, I am of the view that the identity of this form of expression is inconclusive.

In London Corporation v Cusack-Smith [1955] AC 337 (HL) Lord Reid said: 'It does not necessarily follow that if Parliament uses the same words in quite a different context they must retain the same meaning'. That reasoning is emphasised here where the words used are of general application and additional meaning adheres only because of the context.

Counsel for the applicant also attempted to derive some comfort from the use of the word 'entitled' in the subsection in reference to the right to the production of the deed, but, from the reasoning below, this will be seen to be equivocal.

The propositions supporting the defendant's claim that the authorization referred to is limited to that existing in the legal relationship between the parties are these: (a) The construction proposed by the plaintiff, although it does not affect any rights vested under a mortgage existing at the time of the legislation (s. 80(6)), leads to a diminution of the rights of the parties to contract as to the terms of future mortgages. If that were intended one might have expected the Legislature to have been less ambiguous, although the position is not quite the same as in the case of the interference with a vested common law right; for any parties entering into a contract leading to a mortgage after the commencement of the Act should be aware of any circumscription by the Act upon their freedom of contract. It would however be unfortunate if that circumscription were masked by ambiguity, so that it might be expected that such an important fetter would be stated clearly by the Legislature if that were its intent.

(b) As the registration of a second or subsequent mortgage as envisaged by subsec (2)(b) is ex hypothesi an authorised dealing under the Real Property Acts, then if sub-paragraph (a) were to refer to any dealing authorised under the Real Property Acts, the whole of sub-paragraph (b) is superfluous as it would have already been incorporated in sub-paragraph (a). It is a principle of statutory interpretation that, where there are alternative constructions and one would lead to an obvious tautology and the other could be read reasonably and grammatically, the latter is preferable: Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 53 ALJR 522 [see now (1979) 141 CLR 672].

(c) Upon the principle that the section containing obviously related terms should be read as a whole, the same difficulties as in the last preceding paragraph arise in respect of subsec 3(b) which, where relevant, for convenience I shall set out again: '80(3) A certificate of title, instrument of lease, or other document of title lodged in terms of subsection (2) -

(b) shall not whilst so lodged, be used or available for the purpose of registering any instrument, dealing, or mortgage other than those referred to in subsection (2).' Insofar as an instrument cannot be registered unless it is an authorised dealing, there is upon the plaintiff's construction no scope for this sub-paragraph; for there is nothing that can be registered that is not referred to in subsec (2), if the latter refers to all dealings authorised by the Real Property Act. Such a construction that renders another part of the section otiose is repugnant when there exists an alternative construction which can be read compatibly with reason and substance.

(d) An alternative construction that is reasonable can easily be found." 18 It is to be noted that the Queensland section, unlike s 96(2), specifically contemplates that registration may be effected of a second mortgage even if registration be prohibited by the first mortgage. However, it is otherwise only "authorized" dealings in respect of which there is an entitlement to production, except in relation to second mortgages. 19 His Honour held at 791 that an authorised dealing "does not mean a dealing authorized by the land titles system appropriate to the mortgaged land, but rather to a dealing which is authorized by the mortgage or some other provision of law (if any) authorizing a dealing and overriding a limitation imposed by the mortgage." His Honour ruled that a transfer did not fall into that category and that no entitlement to production arose to permit the registration of a transfer. 20 A different conclusion would have been reached in Queensland in relation to a second mortgage, by reason of the specific provision of s 80(4) of the Queensland Act. But production was ordered in Victoria in respect of a second mortgage in the absence of a special exception in relation to subsequent encumbrances. This conclusion was reached by Harper J under the s 86 of the Victorian Land Transfer Act set out in [10] above. The vital difference is that that section does not have the word "instrument" (used there instead of "dealing") qualified by the adjective "authorised". The case was St Kilda Road Pty Ltd v Parker Simmonds Securities Limited (2002) V ConvR 54-652. His Honour said at [4] - [6]: "4 All the preconditions for the operation of this section are established on the evidence before me. An instrument subsequent to the first mortgage has been made by the registered proprietor of the land; such proprietor and one of the persons entitled to the benefit of the subsequent instrument (Witnall Pty Ltd) desire the registration of that instrument; the defendant as first mortgagee holds the certificates of title in relation to the land; and a request has been made by the plaintiff as proprietor to produce the certificates to the Registrar. It follows that, unless the section is subject to an implied exception operating when the proprietor has entered into a subsequent mortgage in breach of a contractual obligation owed by it to the first mortgagee, s 86 applies in the circumstances of this case.

5 The courts cannot by implication alter the plain words of an Act of Parliament. The words of s 86 are, it seems to me, plain. It might nevertheless be said that they confer a right on the plaintiff and do not expressly preclude it from bargaining that right away. Being private - as opposed to public - rights, moreover, they may be excluded by contract.

6 It seems to me that there is a difficulty with this argument. In my opinion, s 86 does not so much confer a right on a registered proprietor, as impose an obligation on a first mortgagee. If so, then it is not within the power of the first mortgagee to exclude by contract or otherwise that which Parliament has included. Only Parliament can, by appropriate words, insert exceptions into that which is otherwise the imposition of an obligation."

His Honour referred to earlier decisions to the same effect in Victoria and South Australia: see In re Armitage; ex parte Andrews (1981) 27 VLR 77; Anthony v Speed [1917] SALR 111. 21 On this case, see Peter Butt's note in (2002) 76 ALJ 478. Presumably, the same conclusion would be reached under the Western Australian s 127. 22 I turn to what little authority there is on the New South Wales provision, bearing in mind its age. A number of commentators, particularly the earlier ones, expressed the view that the intended meaning of the provision is the first alternative, namely, that an "authorised dealing" is any dealing authorised under the Torrens system. To this effect see: E A Francis, Torrens Title in Australasia (1972) at 410; E A Francis, Mortgages and Securities (2nd ed, 1975) at 35; (3rd ed, 1986) at 42; R J Vann, "The Mortgagor's 'Rights' of Inspection and Production of Title Documents," Law Society Journal, Feb 1980, at 34. In the early edition of the Queensland work, Duncan and Vann on Property Law and Practice at para 80.8 (as cited in Holley at 788), the authors adopted and expanded on the view in the second edition of Francis on Mortgages and Securities. However, in the current edition of the Queensland work (looseleaf, 2003) the present authors (W D Duncan and A E Wallace) have in [7.500] modified the view previously expressed to take account of the decision in Holley. Peter Butt, in his Land Law (2001) at [18135] expressed the view that "'authorised' here means not prohibited by the terms of the mortgage or by statute; for example, there is no right to demand that the certificate of title be lodged to enable registration of a further mortgage which is prohibited by the (existing) mortgage." The learned author cites Holley and Finlay v R & I Bank of Western Australia Ltd (1993) 6 BPR 13,242 infra. 23 There is no authoritative decision on the New South Wales section even at first instance level. The only references with any relevance to the situation in recent New South Wales authority are as follows. In Alliance Acceptance Co Ltd v Ellison (1986) 5 NSWLR 102 Young J, as his Honour then was, said at 104 - 105: "The second defendant points to the Queensland decision of Holley v Metropolitan Permanent Building Society [1983] 2 QdR 786 as showing that 'authorised dealing' in the Conveyancing Act, s 96(2), means a dealing authorised by the mortgage or some other provision of law authorising a dealing and over-riding a limitation imposed by the mortgage. He then says that as the fourth covenant does not forbid the granting of a profit à prendre, this dealing must be an authorised dealing.

It may be that Holley 's case depends on specific terms of the Property Law Act (1974) (Qld), s 80, vide at 790 of the report. But assuming that the New South Wales subsection should be construed in a similar way to the Queensland subsection, one still would have to find some dealing which was authorised and the mere fact that the mortgage instrument refers to some transactions which may be effected with consent may not be sufficient for a court to say that all other transactions are therefore impliedly permitted, despite the contra proferentem or expressio unius rules. Really the second defendant's submissions assume that there is some 'natural' right of a mortgagor to deal with the fee simple where there is no prohibition in the mortgage. Indeed decisions involving leases particularly Australia & New Zealand Bank Ltd v Sinclair (1968) 88 WN (Pt 1) (NSW) 117 at 122-123; [1968] 2 NSWR 26 at 31 and Parkinson v Braham [1962] SR (NSW) 663; 79 WN 176, though not directly in point in the instant case, tend against such a proposition."

His Honour went on to say that the real problem is to define the rights of a mortgagor and a mortgagee when land is mortgaged under the RPA. His Honour commented that this had never really been analysed, despite the existence of the legislation for some 125 years. 24 In Nia v Phuong (1993) 6 BPR 13,141 Young J granted an injunction to restrain the registration of a second mortgage in the face of a prohibition contained in the first mortgage. This was on the basis that the second mortgagee was on constructive notice of the restrictive clause in the first mortgage. He had not read the clause but, as it was on the public register, his Honour held that there was a sufficiently strong case of constructive notice to found an interlocutory injunction. There was no adversion to s 96(2) in that decision. 25 In 1993, in Finlay v R & I Bank of Western Australia Ltd supra, Windeyer J said at 13,238: "So far as s 96 of the Conveyancing Act 1919 is concerned the position of the facts in the instant case is such that Gulror could not compel production of the certificate of title as it was not an authorised dealing of the mortgagor with the land, consent not having been given by R & I as required under the charge." 26 Section 96(2) was most squarely dealt with by Santow J, as his Honour then was, in Motor Auction Pty Ltd v John Joyce Wholesale Cars Pty Ltd (1997) 138 FLR 118. This is another case relating to the perfection of a gift. On the subject of s 96(2) his Honour said at 129: "Furthermore, there is no proof that transfer from one joint tenant to another, where both are likely to have given personal covenants, would be an 'authorised dealing' for purposes of s 96(2). This means authorised under the relevant security and not just authorised by the land titles system appropriate to the mortgaged land: Holley v Metropolitan Permanent Building Society . Thus the lender's security could be impaired, by registering the transfer from Mr Joyce, if the effect of doing so were to release Mr Joyce from his personal covenant. That such a result could follow is not inconsistent with the reasoning in Lord Abergavenny's Case (1607) 6 Co Rep 78b; 77 ER 373 followed by Priestley JA in Guthrie v Australia & New Zealand Banking Group Ltd (1991) 23 NSWLR 672 at 676. The former case, by what was described as an exercise of judicial policy preserved the judgment creditor's rights against the transferring joint tenant's moiety. By parity of reasoning Priestley JA held that the mortgagee's rights against the security previously jointly held were preserved notwithstanding severance of the jointure.

Therefore s 96 could not be invoked to compel the mortgagee to lodge the certificate of title. Avco would have to join in any request for production and arguably also Mr Joyce. And the dealing may in any event not be authorised by the mortgagee's security. Finally, there is no evidence that Mr Joyce had even set in hand that step by directing the lender to produce the certificate of title in the first place, a fatal impediment to any gift."

His Honour there clearly expressed a view in favour of the more restrictive interpretation, namely, that a prohibition in a prior mortgage would prevent a dealing from being an "authorised dealing". The expression of that view was probably not necessary to his Honour's decision of the case. 27 In my view, an important principle of statutory interpretation comes into play in dealing with the interpretation of s 96(2). This is because it is my view that the provision is ambiguous, in that "authorised dealing" could bear either of the meanings contended for. The view that the provision is ambiguous is amply confirmed by the diverging views that I have recorded above. The principle of statutory interpretation to which I refer is the presumption against interference with vested interests. Whilst it was not specifically discussed in any of the cases I have cited, it was referred to, at least inferentially, by Derrington J in Holley's case. The general principle was stated as follows in Clissold v Perry (1904) 1 CLR 363 per Griffith CJ at 373: "In considering this matter it is necessary to bear in mind that it is a general rule to be followed in the construction of Statutes such as that with which we are now dealing [compulsory acquisition statutes], that they are not to be construed as interfering with vested interests unless that intention is manifest." 28 The principle was applied by Long Innes CJ in Eq in Bismark Range (Lucknow) Gold Exploration NL v Wentworth (Lucknow) Gold Fields NL (1935) 35 SR (NSW) 400; by the High Court in C J Burland Pty Ltd v Metropolitan Meat Industry Board (1968) 120 CLR 400 and Wade v New South Wales Rutile Mining Co Pty Ltd (1970) 121 CLR 177; and in my judgment in Metropolitan Petar v Mitreski [2003] NSWSC 262. See also Pearce and Geddes, Statutory Interpretation in Australia (5th ed, 2001) [5.15] - [5.17]. 29 To see whether there are rights which would be injuriously affected by the more liberal interpretation of the section, one must give some consideration to the history of the legislation and to the state of the rights of mortgagor and mortgagee prior to the legislation. Section 96(1) goes back to the English Conveyancing and Law of Property Act 1881 s 16. That section is now s 96 of the English Law of Property Act 1925. Section 96 was introduced in New South Wales in 1919 in the CA in its original form. Subsection (2) relating to Torrens system land, was not of course, in the English legislation. It contained the word "authorised" when originally enacted, as it does now. Its introduction was adverted to in the Commissioner's Report into the Conveyancing Act by Sir John Harvey (as he later was): see P W Young and ors, 2 Conveyancing Service New South Wales [35102] at 3512. The report refers to the addition of sub s (2), without any reference to its source, and contains the expression "authorised dealing", without any explanation as to its provenance or intended meaning. 30 It is also of interest to note the terms of the Queensland Report of the Law Reform Commission re Property Law Reform QLRC 16 of 1973 that led to the introduction of the bill for the Property Law Act 1974. That report discussed the abrogation of the first mortgagee's right to forbid by agreement the grant or registration of subsequent encumbrances by the mortgagor. Three of the four Commissioners (at 61) recommended the inclusion of sub s (4) on the basis that the prohibition was outdated and the registration of the subsequent mortgage would not realistically prejudice the rights of the first mortgagee. Interestingly, there was a dissenting memorandum of J J Rowell Esq, who foresaw difficulties being created by the abrogation of the right. For instance, he foreshadowed that it may make the obtaining of mortgage finance more difficult, either altogether or as to the quantum of advances, by reason of the apprehension of lenders arising from the abrogation of the right: see at 61 - 62. As is apparent, his view did not prevail and sub s (4) was included in s 80 when enacted. 31 There is no doubt that there was, before the ameliorative legislation discussed above, a rule of great strictness that the mortgagor during the continuance of a mortgage was not entitled to have, or even to see, title documents (including a copy certificate of title) which were in the mortgagee's hands: Chichester v Marquis of Donegall (1870) LR 5 Ch App 497. An extreme example of this is the decision of the Privy Council in Bank of New South Wales v O'Connor (1889) 14 App Cas 273, a decision on appeal from the Supreme Court of Victoria. And see generally 32 Halsbury (4th ed, 1999) tit Mortgage par 693; G P Stuckey, The Conveyancing Act, 1919 - 1969 (2nd ed, 1970) 208 - 209; E L G Tyler, P W Young and C E Croft, Fisher and Lightwood's Law of Mortgage (Aust ed, 1995) [3.30]. 32 Whether or not this might be thought, in its full strictness, a necessary or appropriate rule in 2005, its existence and acceptance on well established authority over a period of centuries, rather than decades, is undoubted. Insofar as it permits or assists a first mortgagee to compel the discharge of the mortgage, rather than to accept a transfer of the mortgagor's title or the registration of a second mortgage, that is a right that the first mortgagee at present has. The more liberal interpretation of "authorised dealing" would undoubtedly impinge on that right. CONCLUSION 33 My conclusion, in all the circumstances, is that the expression "authorised dealing" ought receive the interpretation that the dealing is permitted or not forbidden as between the mortgagor and the mortgagee. Among the circumstances that conduce to this conclusion are:

(1) Sir John Harvey deliberately included the word "authorised" in s 96(2), although it was not included in, for example, the pre existing WA s 127 or s 134 of the Victorian Transfer of Land Act 1890.

(2) It seems to me that the first interpretation, to the effect that "authorised dealing" in effect means any registrable instrument, would deprive the word "authorised" of any operation, since that has been held (in the St Kilda Road case supra) to be the meaning of a similar provision which does not include the word "authorised". This interpretation would therefore render nugatory the deliberate inclusion of "authorised".

(3) Equally, I do not accept the submission that the interpretation which I have adopted would rob the provision of any area of operation; there would still be circumstances in which it would provide an entitlement, which may not otherwise exist, to have a copy certificate of title produced by the mortgagee, for instance where a mortgage contains no prohibition of transfer or further encumbrance by the mortgagor.

(4) More recent authority favours the interpretation I have adopted. In my view the reasoning in Holley (see [17] and [19] above) is applicable in New South Wales. Recent New South Wales authority is to the same effect: see particularly Finlay and Motor Auction at [25] and [26] above. And this view is coming to be accepted by textbook writers: see [22] above.

(5) Furthermore, the provision being ambiguous, the application of the presumption against interference with vested interests conduces to the conclusion to which I have come. It should not be interpreted so as to deprive mortgagees of any existing rights, eg, those referred to in [31] and [32] above. The language used is not sufficiently clear to have that operation. 34 The argument that the transfers were "authorised dealings", because they were being made under order of the Court was faintly maintained. I am of the view that that argument is not sound. As I have held, "authorised" refers to the situation as between mortgagor and mortgagee. The requirement for authorisation applies whether the transaction involved is voluntary or compelled. The making of orders in proceedings to which the sixth defendant was not a party cannot affect her rights. 35 Thus, the necessity or desirability of enforcing Campbell J's judgment does not go to the interpretation of this statutory provision. It may well be that there are mechanisms available for achieving that end in the proceedings in which the orders were made, although probably not without the joinder of the present sixth defendant as a defendant in those proceedings, from which she is at present absent. Equally, there is no substance in the suggestion that this interpretation renders it absolutely impossible for the plaintiff to get the transfer registered. A list of possibilities was provided by Dixon J in Brunker supra at 604. The plaintiff could apply to the Registrar General to dispense with production of the certificate of title, although it is dubious whether the Registrar General would do so: see J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1969) 90 WN (Pt 1) (NSW) 571 at 581 - 582; Costin v Costin (1994) NSW ConvR 55-715 at 60,100. It could itself pay out the mortgages (thereby increasing its equity in the subject properties). Alternatively, it could borrow against the properties on first mortgage and pay out the sixth defendant's mortgage with the proceeds of that borrowing. It may even be able to sell the properties on the basis of the transfers that it holds and, on settlement, pay out the sixth defendant's mortgages from the proceeds of sale and transfer an unencumbered title to the purchaser. These courses may not be convenient, particularly in view of the liquidation of the plaintiff, but it does not seem to me that they are totally impossible. In any event, the course sought in these proceedings is, however convenient it might be, not available. 36 I should say that the form of application made by the plaintiff was itself misguided. What was sought was in terms an order under s 96(2). Section 96(2) does not confer any power on the Court to make orders; it creates an entitlement to production of documents. However, whilst an order in the form sought by the plaintiff could not be made, if the entitlement under the subsection were established, the Court could give injunctive relief to effectuate that entitlement: see the decisions of Gowans J in Mitrovic v Koren [1971] VR 479 and of Kneipp J in Ex Parte McDougall [1982] QdR 553. 37 By reason of the view I have taken of the interpretation of "authorised dealing", the plaintiff's application under s 96(2) of the CA fails. The order that I earlier made under s 138 of the RPA, of course, stands, but the summons will be otherwise dismissed.

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