Registrar-General v Behn

High Court of Australia|1972-09-29|Before: Brennan JJ

For the reasons that I have given the appeal should in my opinion be dismissed.

I would dismiss the appeal for the reasons given by the Chief Justice.

The respondent was the registered proprietor of an estate in fee simple in land at Silverwater, New South Wales. By the fraud of one Bodiam she was induced to enter into a contract to sell the land to Cornic Loan and Credits Pty. Ltd. ("Cornic") and to allow Cornic to have, before completion, possession of the relevant Certificate of Title and a registerable transfer. Cornic, which had neither the capacity to pay nor the intention of paying the purchase price, procured the registration of the transfer in its favour and gave a bill of mortgage (which was registered after the registration of the transfer) to a bank as security for a debt in an amount exceeding the value of the land. At all material times Cornic was insolvent, and the respondent received only $2,017 of the purchase price of $50,000 payable under the contract of sale. The value of the land at the time of the trial of the present action was $21,000. It is not now disputed that the respondent was deprived of the land by Bodiam's fraud, perpetrated as Cornic's agent.

In the Supreme Court of New South Wales, Holland J. held that the respondent was entitled to bring an action under s. 126 of the Real Property Act 1900 N.S.W. which provides:

(1) Any person deprived of land or of any estate, or interest in land -

(b) through the bringing of such land under the provisions of this Act; or

(d) in consequence of any error, omission, or misdescription in the Register,

may bring and prosecute in any Court of competent jurisdiction an action for the recovery of damages.

(2) An action under subsection (1) shall, in any case in which the land to which the action relates has been included in two or more grants, or a grant in respect of that land has otherwise incorrectly issued, be brought and prosecuted against the Under Secretary for Lands as nominal defendant and, in any other case, shall, subject to subsections (3), (4) and (5), be brought and prosecuted against the person -

(a) upon whose application the land was brought under the provisions of this Act;

(b) upon whose application the erroneous registration was made; or

(c) who acquired title to the land, or the estate or interest therein, through the fraud, error, omission or misdescription.

(5) In any of the following cases, that is to say, -

(b) when the person liable for damages under this section is dead, bankrupt, or insolvent, or cannot be found within the jurisdiction,

such damages with costs of action may be recovered out of the assurance fund by action against the Registrar-General as nominal defendant.

Judgment was entered against the Registrar-General as nominal defendant [11] . On appeal to the Court of Appeal Division the appeal was allowed as to damages only, which were then assessed at $18,983, the difference between the value of the land and the amount received by the respondent. The appellant does not dispute the assessment, but submits that the assurance fund cannot be liable for damages in that amount unless the respondent would be entitled to a judgment for the recovery of damages in that amount if she brought an action against Cornic under sub-ss. (1) and (2). The respondent has already recovered against Cornic a judgment in the sum of $47,983 for the unpaid balance of the purchase price, and it is submitted that she is precluded from recovering a further judgment for a lesser amount against Cornic under sub-ss. (1) and (2), and that the assurance fund is therefore not liable under sub-s. 5 (b) to pay the damages assessed.

[1979] 2 N.S.W.L.R. 496; [1980] 1 N.S.W.L.R. 589.

The relevant condition imposed by sub-s. (5) (b) upon the arising of the statutory right to damages out of the assurance fund is that "the person liable for damages under this section" be insolvent. The phrase "liable for damages" refers to the liability created by the section and that liability is imposed by sub-s. (2) upon a person so soon as a deprivation falling within sub-s. (1) occurs. The phrase does not refer to a liability to suffer the recovery of a judgment for damages either at the time when proceedings under sub-s. (5) are commenced or at the time when those proceedings are brought to judgment. The insolvent to whose liability sub-s. 5 (b) refers is the person upon whom sub-s. (2) (c) imposes the statutory liability, that is to say, Cornic. When liability under the section was imposed on Cornic, it was insolvent. The requirements of sub-s. 5 (b) were then fulfilled, and the cause of action against the appellant arose.

The measure of the assurance fund's liability is defined to be "such damages with costs of action". The damages are "damages under this section", a reference to the damages for the recovery of which an action may be brought pursuant to sub-s. (1) either against the person primarily liable under sub-s. (2) or against the Registrar-General under sub-s. (5). There is no reason why actions should not be brought against both provided there is no double recovery of damages. The respective measures of the damages recoverable by action against the person primarily liable and against the Registrar-General are the same, but the liabilities are several, and the extinction of the cause of action against the person primarily liable does not extinguish the cause of action against the Registrar-General.

If the rights conferred by s. 126 upon a person deprived of land in consequence of the fraud of an insolvent were exhausted by recovering a worthless judgment against him, the remedy under sub-s. (5) would be destroyed. That is a consequence incompatible with the manifest intention of the sub-section. Nor is the cause of action conferred by sub-s. (5) destroyed or affected by an anterior judgment recovered against the fraudulent insolvent upon a non-statutory cause of action, whether in contract or in deceit. Money received by the person deprived of land which goes in diminution of damages recoverable under the section pro tanto relieves the assurance fund of its liability, but an unsatisfied and worthless judgment recovered against the person primarily liable does not diminish the damages which are recoverable by action under sub-ss. (1) and (5).

High Court of Australia Gibbs C.J. Mason, Murphy, Aickin and Brennan JJ. Registrar-General v Behn [1981] HCA 36

At a glance

Court

Decision date

Before

Source

Judgment (21 paragraphs)

Parties

Cases Cited (1)

Cited By (3)