BETWEEN : SANDGATE CORPORATION PTY LTD (IN LIQ) (ACN 079 140 613)

IONNOU NOMINEES PTY LTD & OTHERS (REFER SCHEDULE A)

ROWENA NOMINEES PTY LTD (RECEIVER AND MANAGER APPOINTED, SUPERVISOR APPOINTED AND IN LIQUIDATION)

MARK CONLAN IN HIS CAPACITY AS LIQUIDATOR AND SUPERVISOR OF ROWENA NOMINEES PTY LTD

MARK CONLAN IN HIS CAPACITY AS REPRESENTATIVE CLAIMANT

Insolvency - Liquidator's application for order for sale of land mortgaged under Transfer of Land Act 1893 (WA) - Whether Court has power under Property Law Act 1969 (WA), s 55 to order sale

Land titles under Torrens system - Whether Property Law Act 1969 (WA), s 55 applies to Torrens system land - Property Law Act 1969 (WA) applies to Torrens system land to the extent that it is not inconsistent with Transfer of Land Act 1893 (WA) - Reference in Property Law Act 1969 (WA), s 55(2) to "action ... for foreclosure" inconsistent with Transfer of Land Act 1893 (WA) - References in Property Law Act 1969 (WA), s 55(2) to "action ... for redemption" and "person interested ... in the right of redemption" not inconsistent with Transfer of Land Act 1893 (WA)

Insolvency - Liquidator's application for order for sale of mortgaged land - Dispute between persons claiming interests in the land as to entitlement to sale proceeds - Whether Court has power to order sale under Rules of the Supreme Court 1971, O 17 - Applicants not within O 17 r 1

Conveyancing Act 1919 (NSW), s 88F, s 90, s 101(1), s 103(2) and s 103(7)

Conveyancing and Law of Property Act 1881 (UK), s 25(2)

Property Law Act 1969 (WA), s 6(a), s 7, s 53(1), s 53(2), s 55(2), s 55(7), s 57(1), s 58(1), s 59, s 67(1), s 67(4) and s 108

Property Law Act 1958 (Vic), s 86 and s 91(2)

Real Property Act 1900 (NSW)

Rules of the Supreme Court 1971, O 17 r 1, r 2, r 9 and r 15

Transfer of Land Act 1893 (WA), s 85, s 106(1), s 108, s 111, s 113, s 121, s 122, s 123, s 242(1) and s 242(3)

Transfer of Land Act 1928 (Vic)

First Plaintiff : Mr C L Zelestis QC & Ms K F Banks-Smith

Second Plaintiffs : Mr C L Zelestis QC & Ms K F Banks-Smith

Arab Bank Plc v Mercantile Holdings Ltd [1994] Ch 71

Australian Securities Commission v Buckley; Becke v National Australia Bank Ltd, unreported; SCt of NSW (Santow J); 20 December 1996

Barlow Clowes International Ltd (In Liq) v Vaughan [1991] EWCA Civ 11; [1992] 4 All ER 22

Barrett v Halifax Building Society (1995) 28 HLR 634

Berkeley Applegate (Investment Consultants) Ltd (In Liq), In Re [1989] Ch 32

Bishopsgate Investment Management Ltd (In Liq) v Homan [1994] EWCA Civ 33; [1994] 3 WLR 1270

BP Benzin Und Petroleum AG v European-American Banking Corporation [1978] 1 Lloyds Rep 364

Earl of Cork v Russell (1871) LR 13 Eq 210

Elders Rural Finance Ltd v Westpac Banking Corporation (1988) 4 BPR 9383

Elders Rural Finance Ltd v Westpac Banking Corporation, unreported; SCt of NSW (Bryson J); 6 November 1989

Farnol Eades Irvine & Co Ltd, Re [1915] 1 Ch 22

Fink v Robertson [1907] HCA 7; (1907) 4 CLR 864

G B Nathan & Co Pty Ltd (In Liq), Re (1991) 24 NSWLR 674

Goldcorp Exchange Ltd, Re [1994] UKPC 3; [1995] 1 AC 74

Long v Town (1889) 10 LR (NSW) Eq 253

Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133

Moodemere Pty Ltd (In Liq) v Waters [1988] VicRp 31; [1988] VR 215

Octavo Investments Pty Ltd v Knight [1979] HCA 61; (1979) 144 CLR 360

Polonski v Lloyd's Bank Mortgages Ltd (1997) TLR 244

Schultz v Corwill Properties Pty Ltd (1969) 90 WN (Pt 1) (NSW) 529

Universal Distributing Co Ltd (In Liq), Re [1933] HCA 2; (1933) 48 CLR 171

Woolley v Colman [1882] 21 Ch D 169

1 STEYTLER J: The plaintiffs have applied, by originating summons, for an order for the sale of the land described in certificate of title volume 1069 folio 416, more commonly known as Karri Oak Vineyard. They want to sell the property free of all encumbrances and claimed interests in respect thereof to a purchaser, Frankland Valley Co Ltd ("Frankland Valley"), for a price of $4,950,000. The contract of sale which has been made with Frankland Valley is conditional upon the court making the order which has been sought. The plaintiffs also want orders which, in effect, will replace the security interests which exist in the land with corresponding interests in the proceeds of its sale.

2 The first plaintiff ("Sandgate"), a company in liquidation, is the registered proprietor of the land. There is, on the land, a substantial vineyard. I will consequently refer to the land as "the vineyard land". The vineyard was developed as part of a managed investment scheme in which members of the public invested. Each investor is entitled to a leasehold interest over a designated part of the vineyard land.

3 The manager of the managed investment scheme, Karri Oak Pty Ltd ("Karri Oak"), is also in liquidation. However its management rights are of significant value so long, of course, as the managed investment scheme subsists. Because Sandgate is the major creditor of Karri Oak, it would like to see Karri Oak obtain a reasonable price for its management rights. Karri Oak has contracted with Frankland Valley for the assignment of those rights to Frankland Valley for a price of $1,500,000. The contract for sale of the management rights has also been made conditional upon the court making the orders which have been sought.

4 It seems to be generally accepted by the parties (in a case in which little else seems to be generally accepted) that the vineyard is a wasting asset. It requires to be irrigated, "fertigated" (whatever that may mean) and maintained. However the liquidators of Sandgate do not have enough money to do these things. Frankland Valley is prepared to assist but, it seems very probable, only for a short while and certainly not if it turns out to be unable to proceed with its acquisition of the vineyard land and the management rights. There is also no dispute as to the fact that the purchase price payable by Frankland Valley for the vineyard land and management rights is reasonable. The affidavit evidence before me discloses that if the sale does not go through then it is very likely that the vineyard will fall into disrepair, the managed investment scheme will collapse, the vineyard land will lose some of its value and the management rights will become worthless.

5 However some of Sandgate's secured creditors, being a number of the first claimants represented by Mr Solomon in these proceedings, are not prepared to allow the sale to go through without the discharge of the encumbrance which is registered in their favour and the payment to them of the money thereby secured.

6 Their security arises out of the registration of mortgage G976295. This mortgage lists 108 separate mortgagees (and Mr Solomon's clients comprise around half of these) all of whom have as their address the business premises of "Graeme Grubb Finance Broker", the business name of a company now in liquidation, Rowena Nominees Pty Ltd ("Rowena"). Rowena, in the course of its business as a finance broker, promised potential investors that they would be given first mortgage security over identified property, including the vineyard land. It took money from investors and, in some cases at least, passed it on to a named borrower. Some of the investors were given the security which they had been promised and others were not. The selection of those who obtained security and those who did not appears to have been random. Moreover, Rowena maintained a trust account into which money was usually paid by investors. However, for reasons which do not presently matter, that trust account was overdrawn on many occasions and money which was paid into it for onlending to borrowers did no more, on those occasions, than reduce or extinguish the overdraft.

7 The liquidation of Rowena, and of other companies which are related to it, has left many investors in a potentially disastrous position. In a judgment given in a related matter (Oakleigh Acquisitions Pty Ltd (In Liq) v Rowena Nominees Pty Ltd (Receiver and Manager Appointed) (In Liq) (Supervisor Appointed) [2000] WASC 41) Owen J has said that the total sums involved may be in the region of $34,000,000.

8 The total sum, leaving aside interest, which is secured by mortgage G976295 is $3,600,000. If the sale goes through there will be sufficient funds available to Sandgate from Frankland Valley to pay the debt secured by that mortgage in full.

9 Curiously enough, before that mortgage was registered Rowena sought to register a different mortgage said to secure $6,525,000. Many of the same people were listed as mortgagees on the prior document but there were differences. When the prior document was rejected by the Department of Land Administration it was replaced by mortgage G976295. It seems that, at that time, some $3,200,000 had been advanced to Sandgate.

10 Thereafter additional funds were advanced to Sandgate. It had some other property, apart from the vineyard land, which it offered for security. It received approximately $12,645,704 in total from Rowena by way of loans. It assumed that all loans would be secured. Mortgages have been registered over the vineyard land and over land described as "O'Neill Road" to secure advances totalling approximately $4,888,000 made by numerous individual investors. There is consequently a balance of some $7,757,704 advanced to Sandgate in respect of which it does not know the source of the funds or the detail of what security was to be provided.

11 Caveats have been registered against the vineyard land by persons claiming to be entitled to security over it. Each of the second claimants has lodged a caveat claiming an entitlement to an equitable charge over the vineyard land arising out of loans said to have been made by them, through Rowena, to Sandgate for the purpose of assisting in the purchase of that land. The third claimant has also lodged a caveat. It says that in May 1999 it advanced funds to Sandgate to purchase land described as "Redmond Road" and that Sandgate gave it two registered mortgages over that property to secure the advance. There were then vine rootlings planted at Redmond Road and, after the funds were advanced, some of these were transplanted to the vineyard land. The third claimant contends that the rootlings were consequently charged in its favour under the terms of the registered mortgages and that, as a consequence of their transfer to the vineyard land, it has an interest in that land.

12 There are still others who are not among the registered mortgagees and who do not have caveats over the vineyard land but who claim to be interested in it. I was told that some of these might seek specific performance of agreements allegedly made on their behalf by Rowena with Sandgate to the effect that a registered mortgage would be provided by Sandgate to secure advances made by them to Sandgate. The liquidators of Sandgate contend that if these presently unsecured lenders to Sandgate should be successful in obtaining specific performance of those alleged agreements they may, pursuant to the terms of those agreements, be entitled to the same priority as those who presently hold registered mortgagees. While Mr Solomon disputed that claims of this nature have any realistic prospect of success it is not possible to say that this is so on the presently confused state of the evidence.

13 I was also told that the information available to the liquidators discloses that some of the people who are listed on the title as registered mortgagees may hold their interest as such on trust for others if the funds which those people invested were not advanced to Sandgate (as appears to have been the case in some instances) but were advanced elsewhere and other funds, provided by other investors, were advanced to Sandgate against a promise that those other investors would be given security in the form of a registered mortgage over the vineyard land.

14 One of the two liquidators of Sandgate has said on oath that the plaintiffs are in no position to identify the number of the potential class of claimants against the vineyard land or the validity or quantum of their claims. This is because Sandgate received lump sum cheques from Rowena without knowing from whom those funds were obtained or for what purpose the investors who provided them intended that they should be used. Nor do the liquidators know what was said by Rowena to the investors as to the ultimate use of the funds or as regards the question of security.

15 So far as the caveators are concerned the liquidators say that, even if they had enough information to assess the validity of their claims, they would not be able to satisfy them because of their knowledge that other claims, which might rank equally, could still be made.

16 This confused and disturbing situation has led to the granting of an injunction restraining the Registrar of Titles from registering:

(a) a discharge of, or other dealing affecting, a mortgage of which Oakleigh Acquisitions Pty Ltd (In Liquidation) ("Oakleigh"), the company which acted as trustee for investors who supplied money to Rowena for onlending to borrowers, is the sole proprietor or a discharge of or other dealing affecting mortgages registered in the name of a person or company associated with Oakleigh, Rowena or Mr Graeme Grubb unless it is signed by Mr Mark Conlan (the liquidator of Rowena and Oakleigh) or unless the discharge or dealing is accompanied by a written consent by him to that discharge or dealing; and

(b) a discharge or other dealing in relation to mortgages which are registered in the name of Oakleigh and other investors or in relation to any other mortgages, unless the discharge or dealing is accompanied by a document signed by Mr Conlan verifying that he was given not less than 5 days notice of intention to present the discharge or dealing for registration and that he has not applied to the court for further relief in relation to that mortgage.

17 The injunction was ordered in the proceedings before Owen J to which I have earlier referred. The applicants who had sought interlocutory relief in those proceedings were Mr Conlan (in his capacities as liquidator of Oakleigh and supervisor of Rowena), Oakleigh and Rowena. They wanted, amongst other things, declarations that:

(a) all mortgages in the name of Oakleigh were to be held on trust for Rowena and that they should be transferred to Rowena to be held by it on trust for those persons who had claims upon its trust account;

(b) if the trust account operated by Rowena went into overdraft between the date upon which an investor paid money into it and the date upon which the money was paid to a borrower, the money received on a discharge of the mortgage or by way of interest should be paid to Mr Conlan to be held on trust pending further orders;

(c) if Mr Conlan's enquiries should reveal that a registered mortgagee did not provide the money advanced to a borrower, monies paid in discharge of the mortgage or in payment of interest are to be held by Mr Conlan on trust pending further order;

(i) an investor's money could be traced into a loan secured by a mortgage granted by a borrower to whom the investor had agreed to lend funds; and

(ii) there were sufficient funds in the trust account at the date of the advance for the advance to be made without recourse to funds held on trust for any person other than the investor or borrower,

all mortgages, whether registered or not, were to be held on trust for all claimants upon the trust account.

18 Owen J said (at par 14 of his reasons) that the gravamen of the claim on which the application for these declarations and orders was based was that Rowena acted beyond authority and in fraud of investors by:

"(a) registering mortgages in the names of investors whose funds had not been advanced to the borrower who executed the mortgage;

(b) causing mortgages to be registered in the name of Oakleigh, rather than the name[s] of the [various] investor[s], without the investor[s'] knowledge or consent;

(c) using trust moneys for purposes that were not authorised by the beneficiar[ies] of the trust;

(d) advancing money to a borrower from a trust account that was overdrawn at some time between the date when the investor's money was paid into the trust account and the date when the borrower signed the mortgage or the date when the advance was paid out of the trust account to the borrower;

(e) obtaining executed discharges of mortgage from investors and registering those discharges, even though the borrower had not repaid the moneys;

(f) causing an investor to become registered as a mortgagee, following a fraudulently obtained discharge of a previous mortgage, even though that investor had not advanced funds to the borrower."

"The relief claimed highlights the enormous breadth of the investigations that those charged with unravelling the affairs of GGFB [Graeme Grubb Finance Broker] have been making and will be required to make. It gives a lead to the types of situations and the classes of persons or entities likely to be affected by and in the action and related litigation. It also highlights the wide range of issues that the Court will be asked to resolve."

20 Owen J found that there were serious questions to be tried in some respects at least.

21 One of the contentions which, it was submitted to Owen J, raised a serious question to be tried was that to the effect that, due to the mixing of the trust funds from which the money was advanced and the fact that the trust account was, from time to time, overdrawn, the resulting mortgages were held on a constructive trust for those who had claims on the trust fund. His Honour said, in this respect (at pars 33 and 34) the following:

"As to the second issue, I think it is common ground that the equitable remedy of tracing cannot be applied to an overdrawn trust account: Barlow Clowes International Ltd (In Liq) v Vaughan [1991] EWCA Civ 11; [1992] 4 All ER 22 at 42. That means it may well be impossible to pursue remedies in rem. However, even if the mortgagees have indefeasible title protecting them from remedies in rem, a claim in personam may be pursued. Counsel for the applicants submitted that in these circumstances, and to the extent that moneys other than the registered mortgagee[s'] funds were advanced to the borrower, the mortgagee[s] held the mortgage on a constructive trust for the trust fund.

On the authority of cases such as Australian Securities Commission v Melbourne Asset Management Nominees Pty Ltd [1994] FCA 1031; (1994) 49 FCR 334, I think the proposition is arguable. However, for the purposes of interlocutory relief of this nature, there are some serious difficulties. Normally, the in personam remedy would be pursued by a rival claimant to the fund who can directly assert the personal equity against the registered mortgagee. Once all the classes of claimant have been established and they are represented the situation may alter. But at the present, I am not sure that there is a person who can properly assert a personal equity such as to defeat indefeasibility."

22 His Honour went on to find that there was possible substance to an argument that the registered mortgagees were accountable on the basis of unjust enrichment. The contention which had been advanced to his Honour in this respect was that the registered mortgagees had received a benefit, namely the registration in their favour of a mortgage, as a result of the misapplication of trust property and that it would be unjust for them to retain that benefit even though, at the time at which they obtained it, they were unaware of the misapplication of the trust property. The applicants referred, in support of their argument, to Koorootang Nominees Pty Ltd v Australia & New Zealand Banking Group Ltd [1998] 3 VR 16 at 100 - 105 and to Moore J: "Equity, restitution and in personam claims under the Torrens system: Part Two" 73 ALJ at 712. Owen J said, in respect of the applicants' contentions (at par 41):

" ... The difficulty, I think, lies in decisions such as Macquarie Bank Ltd v Sixty Fourth Throne Pty Ltd [1998] 3 VR 133 where it was held that mere receipt of trust property is insufficient to give rise to a personal equity such as would defeat an otherwise indefeasible title. Nonetheless, and particularly if the investors, or some of them, can be classed as volunteers (in which case it may not be necessary to establish dishonesty: Lord v Spinelly (1991) 4 WAR 158 at 172), the case might be arguable on a 'knowing receipt' basis. But, once again, my reticence to grant a global prohibition in the absence of evidence of particular situations, comes to the fore."

23 His Honour was consequently prepared only to grant the limited injunctive relief to which I have earlier referred.

24 Mr Conlan (in his abovementioned capacities), Oakleigh and Rowena have since lodged a notice of appeal against the orders made by Owen J.

26 The position has been reached where all claimants to an interest in the vineyard land have had notice of what is proposed by the plaintiffs. All of those who appeared, with the exception of those represented by Mr Solomon, agreed with the orders sought. I was told that many who did not appear had informed the solicitors for the plaintiffs that they supported what was proposed. Others who did not appear gave no reason for not doing so but presumably did not wish to be heard in opposition.

27 Mr Solomon's contentions in opposition to the plaintiffs' application were twofold. The first was that I had no power to make the orders sought. The second was that, if I did have that power, I should not, as a matter of discretion, exercise it.

28 As to the first of those contentions the plaintiffs sought to bring their claim within s 55 of the Property Law Act 1969 or, if that section is inapplicable, within the compass of an inherent power which, it was said, the Supreme Court has to order a sale in much the same circumstances as those dealt with under that section or, in the further alternative, within the provisions of O 17 r 1, r 9 and r 15 of the Rules of the Supreme Court, being those which deal with interpleader proceedings. Mr Solomon contends that none of these provides a sufficient foundation for the making of orders of the kind sought.

30 The plaintiffs relied upon O 17 r 1(a)(i) and r 9.

31 Under O 17 r 1(a)(i) relief by way of interpleader may be granted by the court where the person seeking relief (called the applicant) is "under liability ... to yield up or give possession of any land ... in respect of which he is or expects to be sued by 2 or more parties (called the claimants) making adverse claims".

32 Order 17 r 9 provides that, whenever it "appears desirable from the nature of the subject matter or the parties agree, the Court or a Judge may order the sale of the whole or any part thereof and direct the application of the proceeds according to the rights of the parties as determined on the interpleader proceedings".

33 It seems to me that there is an insuperable obstacle which faces the plaintiffs in bringing themselves within O 17 r 1(a)(i). That is because, even if it be assumed that the plaintiffs are under liability to yield up or give possession of the vineyard land, it cannot, in my opinion, be said that that liability is one in respect of which the plaintiffs, or any of them, should expect to be sued by parties making adverse claims. The real dispute, here, relates to the existence and priority of security holders and, consequently, to the manner in which the proceeds of the sale of the vineyard land should be disbursed. It does not, I think, relate to the liability of the plaintiffs, or any of them, to yield up or give possession of that land.

34 It is, moreover, significant that by the terms of O 17 r 2(3) a summons under the rule must be supported by evidence, inter alia, that the applicant claims no interest in the subject matter in dispute other than for charges and costs. While the plaintiffs say that they claim no interest in the subject matter of the dispute, they base this upon the proposition that the proceeds of sale of the vineyard land will, having regard for the liquidation of Sandgate, go entirely to its creditors. However, I have mentioned that the plaintiffs contend only that they come within O 17 r 1(a)(i). They do this because, under O 17 r 9 the court is able, whenever it appears desirable from the nature of the subject matter, to order a sale of the whole or any part thereof. If the plaintiffs are right in their contention that the "subject matter" in dispute is the vineyard land itself then Sandgate does claim an interest in it as registered proprietor. If, on the other hand, the subject matter in dispute is something other than the land, namely a liability for any debt or money (see r 1(a)(iii)), then there is, under r 9, no power to order the sale of the land itself, as counsel for the plaintiffs acknowledged.

35 It follows from all of this that, while it must be accepted that O 17 should, having regard for its remedial nature, be given a liberal construction (as to which see Carew Corporation Pty Ltd v The R & I Bank of Western Australia Ltd, unreported; FCt SCt of WA; Library No 930713; 21 September 1993 at 7 and Sun Insurance Office v Galinsky [1914] 2 KB 545 at 558), the plaintiffs are unable to bring themselves within its provisions for the purposes of this application.

36 That brings me, next, to the provisions of s 55(2) of the Property Law Act. That section reads as follows:

"55. Sale of mortgaged property in action for redemption or foreclosure

(2) In an action, whether for foreclosure, or for redemption, or for sale, or for the raising and payment in any manner of mortgage money, the Court, on the request of the mortgagee, or of any person interested either in the mortgage money or in the right of redemption, and, notwithstanding that -

(b) the mortgagee or any person so interested does not appear in the action,

and without allowing any time for redemption or for payment of any mortgage money, may, if it thinks fit, direct a sale of the mortgaged property, on such terms, subject to subsection (3), as it thinks fit, including the deposit in Court of a reasonable sum fixed by the Court to meet the expenses of sale and to secure performance of the terms.

37 The plaintiffs, by their counsel Mr Zelestis QC, claim that they are able to bring themselves within the section as the action is one "for sale, or for the raising and payment in any manner of mortgage money" and because Sandgate is a "person interested ... in the right of redemption".

38 Mr Solomon, on the other hand, contends that Sandgate is not a "person interested ... in the right of redemption" for the purposes of s 55(2). He submits that the "right of redemption" mentioned in that section relates only to a mortgage of general law land and that s 55(2) does not deal, at all, with land under the Torrens system.

39 The section has its origins in s 48 of the Chancery Amendment Act 1852 (UK) and s 25(2) of the Conveyancing and Law of Property Act 1881 (UK). While the court had always had some jurisdiction, at least, to order the sale of land instead of foreclosure, that jurisdiction became, with the enactment of these provisions, a statutory one. (See, for example, the discussion in Megarry, R; Wade, H "The Law of Real Property" 5th ed Stevens & Sons Ltd, London, 1984, pages 933 ff, especially at 935, and cf Manton v Parabolic Pty Ltd (1985) 2 NSWLR 361 at 375 - 379).

40 As has been pointed out by Sir Donald Nicholls VC in Palk v Mortgage Services Funding Plc [1993] Ch 330 at 335, the section, when first enacted, only empowered the court to make an order for sale in the course of foreclosure proceedings and its object was that of avoiding "the great delay and expense which is occasioned by foreclosure and redemption in a case where there is a great number of successive mortgages" (per Sir John Romilly MR in Hurst v Hurst [1852] EngR 1138; (1852) 16 Beav 372 at 374). However, when s 48 of the Chancery Amendment Act 1852 was replaced by s 25(2) of the Conveyancing and Law of Property Act 1881, the court was given the power to direct a sale at any time. As has been pointed out in Palk, above at 335, Sir George Jessel MR, in Union Bank of London v Ingram (1882) 20 Ch D 463 at 464, said of the then new legislation that:

"The Act is a remedial Act, one effect of it being to allow a mortgagor whose property is worth more than the mortgage-money, but who cannot raise it, to obtain a sale and get the benefit of the surplus. The Act being remedial is to be construed liberally".

"This is an enabling and remedial statute intended to give the Court a very beneficial power, and I do not see any reason to cut down the words of the enactment ...."

42 The provisions to which I have referred were, of course, enacted in England against the background of a system of general law land only. No doubt it is for that reason that s 55(2) speaks of "an action ... for foreclosure". As Young J has pointed out in Yarrangah Pty Ltd v National Australia Bank Ltd [1999] NSWSC 97 at [22], the predecessors to s 55(2) formed part of the equity procedure in foreclosure suits and, because foreclosure under the Torrens system is dealt with administratively after an aborted sale by auction (as to which see s 121 and s 122 of the Western Australian Transfer of Land Act 1893), the matter never comes before a court of equity and there can, consequently, be no "action ... for foreclosure" in the context of Torrens system land.

43 It might, strictly speaking, also be said to be inappropriate to speak of a "person interested ... in the right of redemption" in the context of Torrens system land.

44 A registered mortgage of land under the Transfer of Land Act, unlike a general law mortgage, does not operate as a transfer of the land thereby mortgaged. That is because of the provisions of s 106(1) of that Act which provide that a mortgage and charge under that Act "shall when registered ... have effect as a security but shall not operate as a transfer of the land thereby mortgaged or charged". (See also Re Real Estate and Business Agents Supervisory Board; ex parte Cohen [1999] WASCA 47 at [53] and [54]). Consequently, because the mortgagor retains the legal title to the land, there is, in the context of Torrens system land, no question of any equity of redemption of that title.

45 In Greig v Watson [1881] 7 VLR 79, to which I was referred by Mr Solomon, Stawell CJ explained the distinction (at 82 - 83) in the following way:

"It is necessary to go almost to first principles in considering this case. A mortgagor, who filed a bill to redeem, asked for relief in equity from a forfeiture. The land was conveyed to the mortgagee to secure payment of a certain sum of money. That conveyance was subject to a condition, namely, payment at a particular time, of the amount advanced. If the money was not paid at the specified date, the condition was broken, and the estate became absolutely vested at law in the mortgagee. A Court of Equity, however, relieved the mortgagor from such a hardship, and would order the mortgagee to reconvey to the mortgagor on payment of the mortgage money and all interest, costs and expenses. The mortgagor thus obtained substantial relief. His estate was forfeited at law, and was redeemable only in equity ... .

The question in the present case is, whether there can be foreclosure as to land under the 'Transfer of Land Statute,' or in other words, whether there is a forfeiture under that Act; for if there is no forfeiture neither can there be any 'redemption' in the old acceptation of that expression. It appears to me that the Statute has done away with forfeiture ... ".

46 Similarly, in Perry v Rolfe [1948] VicLawRp 51; [1948] VLR 297 at 303, also relied upon by Mr Solomon, Fullagar J said that there could be no such thing as a true redemption suit in the case of a mortgage under the Transfer of Land Act (although this was said in a context in which his Honour was called upon to decide whether or not the rule which entitles a mortgagee to costs in a redemption action, unless guilty of misconduct or of having acted unreasonably, applied to a situation in which the mortgagor sought to compel the mortgagee to execute a discharge of a mortgage under the Transfer of Land Act 1928 (Vic)). (See also Ex parte National Trustees Executor & Agency Co of Australia Ltd [1912] HCA 31; (1898) 19 ALT 222; Elders Trustee & Executor Co Ltd v EG Reeves Pty Ltd (1988) 20 FCR 164 at 171 and Latec Investments Ltd v Hotel Terrigal Pty Ltd (In Liq) [1965] HCA 17; (1965) 113 CLR 265 at 275).

47 Sykes, E I; Walker, S "The Law of Securities", 5th ed The Law Book Company Ltd, Sydney, 1993, at 241, discusses the cases of Perry v Rolfe and Greig v Watson, in the following way:

"The decision in Perry v Rolfe is expressly based on the view that the mortgagor has a legal right to redeem at all relevant times ... and indeed contains some very strong dicta. .. The earlier decision of Greig v Watson has been interpreted as resting on a similar basis. Such a view is also explicitly stated in the New South Wales case of Browne v Cranfield (1925) 25 SR (NSW) 443 at 448, 450. Now it is undoubted that the Torrens statutes necessarily imply a right to redeem after the contractual date for payment has passed, otherwise the provision of the foreclosure remedy would be meaningless. However, it is quite another thing to say that such a right is a "legal" one. Such a view seems to rest on the confusion between the estate of the mortgagor and her or his personal right to redeem, both of which are indifferently termed "equity of redemption" under the general law. In the case of the old title mortgage, before default the mortgagor's right in personam to redeem was legal, that is to say, it flowed from the terms of the contract and was regarded as an enforceable right at common law, though the only efficient means for its enforcement would be an equitable suit for specific performance. After default the personal right to redeem rested only on equity. At all times the mortgagor's estate in the land was equitable only. The estate of the Torrens titled mortgagor, however, remains legal throughout because the mortgage does not act as a conveyance.

It is thought in this connection that the decision in Quint v Robertson (1985) 3 NSWLR 398 that a Torrens titled mortgagor's interest in the land is not an equity of redemption is very apt. The authors also regard statements equating the procedure available to a Torrens title mortgagor to enforce her or his claim to a discharge of the mortgage with a "suit to redeem" or a "suit for redemption" as highly questionable to say the least. ... However, the fact that the mortgagor's estate is legal does not impart a legal flavour to the personal right to redeem. The right to redeem on the contractual date is necessarily legal in character, but it is submitted that after default the right is based on equity only."

48 Whatever else may be said, it seems plain that in Australia the expression "right of redemption" has come to comprehend the legal right to have the mortgage discharged as a matter of contractual right if the mortgagee is paid by the due date and also the truly equitable right to "have the land restored" if there is a repayment after the due date but before foreclosure. (See Tyler E L G; Fisher, W R; Croft, C; Young, P W; Lightwood, J M "Fisher & Lightwood's Law of Mortgage [Australian Ed]", Butterworths, Sydney 1995 par 1.11 and cf Sykes and Walker, above, at 237 - 238.)

49 Illustrative of this is the fact that there are references in the Transfer of Land Act itself to a right to "redeem" land mortgaged under that Act. Thus, s 111 of that Act provides for an entitlement, on the part of a mortgagee, to "foreclose the right of the mortgagor or his transferees to redeem the mortgaged land ... ". Also, s 113 of that Act provides for certain covenants to be implied in every mortgage made under its provisions. One of these is that "the mortgagee and his transferees may at all reasonable time [sic] until such mortgage be redeemed enter into and upon such land with or without surveyors or others to view and inspect the state of repair of ... buildings or improvements".

50 The notion of a right of redemption appears also to have been recognised in the context of other Torrens system legislation. Thus Herring CJ, in Re Forrest Trust [1953] VicLawRp 37; [1953] VLR 246, after discussing the nature of a mortgage under the Transfer of Land Act 1928 (Vic), has said (at 256):

"The nature of a mortgage under the Act being what I have described, it necessarily followed that there was inherent in it a right on the part of the mortgagor, upon his fulfilling his obligations under the mortgage, to have the land freed from the mortgage and from all the powers and rights of the mortgagee, which formed a substantial curtailment of the mortgagor's dominion over the land. This is a right to redeem in the sense in which equity understood that term, and the effect of its exercise, by payment off of the money secured by the mortgage, is aptly described ... [by] Lord Macnaghton in Noakes v Rice [[1902] AC 24] ...".

51 Lord Macnaghton had there said (at 30) that, when money secured by a mortgage is paid off, "the land itself and the owner of the land in the use and enjoyment of it must be as free and unfettered to all intents and purposes as if the land had never been made the subject of the security".

"The Legislature does not expressly provide in so many words that the mortgagor shall have such a right. It rather assumes that everyone will understand that such a right is inherent in a mortgage transaction that is to take effect as a security, and it expressly recognises its existence ...."

(See also 268, per Gavan Duffy and Dean JJ). Much the same might be said of the Transfer of Land Act in this State.

53 It consequently seems to me that, unlike the reference in s 55(2) to an "action ... for foreclosure" which, by its nature, can only apply to general law land, the references to an "action ... for redemption" and to a "person interested ... in the right of redemption" are capable of applying both to general law land and to land under the Torrens system. The real question is whether they are intended to do so.

54 That question is, in the end, one of statutory construction. While it is true, as I have said, that s 55(2) has its origins in legislation enacted against the background of a system of general law land only, it should not be overlooked that the Property Law Act, when enacted in Western Australia in 1969 (and it retains the character of a remedial Act), was enacted at a time when the Transfer of Land Act had already been in force in this State for some 76 years. Moreover s 6(a) of the Property Law Act provides that, except as in that Act expressly provided, the Act "so far as inconsistent with the Transfer of Land Act 1893 ... does not apply to land that is under the provisions of ... [that Act]". It follows from that section that, except to the extent of inconsistency and except where the contrary is expressly provided, the Property Law Act does apply to land that is under the provisions of the Transfer of Land Act.

55 I should also mention in this respect that, while the word "mortgage" is defined in s 7 of the Act as including a charge or lien on any property for securing money or money's worth, that section also provides that the words "mortgage", "mortgagee" and "mortgagor" in relation to land under the Transfer of Land Act have the same respective meanings as they have in that Act. I should add that the expression "right of redemption" is also defined in s 7 of the Property Law Act. However the definition provides only that, in relation to a mortgage, the expression includes an option to repurchase only if the option in effect creates a right of redemption.

56 Because there is nothing in s 55(2), or elsewhere in the Property Law Act (other than in s 6(a) thereof), which deals expressly with the application, or otherwise, of that section to land under the Transfer of Land Act, the question is whether the provisions of that section are inconsistent with the Transfer of Land Act and, if so, to what extent. For the reason pointed out by Young J in Yarrangah, above, they are, as I have said, inconsistent with the notion of application to land under that Act so far as the reference to "an action ... for foreclosure" is concerned. However it is, as I have also said, possible to speak of an "action ... for redemption" or of a "person interested ... in the right of redemption" in the context of land under the Transfer of Land Act. It is also possible to speak of an "action ... for sale, or for the raising and payment in any manner of mortgage money" in the context of general law land or in that of land under the Transfer of Land Act.

57 The provisions of the Property Law Act relating to mortgages are contained within Part VI of that Act which encompasses s 53 to s 68 inclusive. These shed some light on what might have been the legislative intention as regards the application of that Part to land under the Transfer of Land Act.

58 Section 53(1) of the Property Law Act provides that "[o]n a decree, judgment or order absolute for foreclosure, the mortgagee shall be deemed to have taken the property mentioned in the decree, judgment or order in full satisfaction of the mortgage debt and his right or equity to bring any action or to take other proceedings for the recovery of the mortgage money from the debtor, surety or other person is extinguished". That section also provides that "the right or equity of the mortgagor to redeem the property is also [thereupon] extinguished".

59 It seems to me to be plain that, as was submitted by Mr Zelestis, this provision is intended to apply both to general law land and to land registered under the Transfer of Land Act. That is because s 53(2) of the Act provides that:

"In the case of mortgages of land under the Transfer of Land Act 1893 'order absolute' includes an order for foreclosure under the hand of the registrar when entered in the Register within the meaning of that Act."

There would be no point in this provision if the intention as regards the operation of s 53(1) was not that which I have suggested.

60 On the other hand, s 58(1) of the Property Law Act provides that the provisions of s 57(1) thereof (which deals with the implied powers of a mortgagee, where the mortgage is made by deed), so far as they relate to the power to appoint a receiver, apply to a mortgage registered under the Transfer of Land Act and that, in applying those provisions, the expression "mortgage deed" is to be construed as including a mortgage under the Transfer of Land Act. The plaintiffs sought to explain this provision by submitting that, because instruments under that Act are not necessarily deeds (albeit s 85 of that Act provides that every instrument "shall be deemed of the same efficacy as if under seal"), s 58(1) of the Property Law Act merely makes it clear that, in s 57(1), the reference to a "mortgage ... made by deed" is intended to encompass a mortgage under the Transfer of Land Act even if not made by deed.

61 However it might be thought to be more persuasive that s 58(1) assumes that s 57(1) does not apply, at all, to mortgages under the Transfer of Land Act (and the provisions of s 57(1)(a), dealing with the power of sale, are, as Mr Zelestis acknowledged, unlikely to have been intended to apply to mortgages under the Transfer of Land Act having regard for the fact that that Act makes its own provision in that respect (see s 108 thereof and also s 6(a) of the Property Law Act)) and that it was for this reason that the legislature has found it necessary expressly to confer upon a mortgagee of a mortgage registered under the Transfer of Land Act, the power to appoint a receiver of the income of the mortgaged property, or part thereof, or of an interest in income, or of a rentcharge or an annual or other periodical sum or any part thereof.

62 Next, s 59 of the Property Law Act, which limits the exercise of the power of sale conferred by that Act in respects there set out, provides, by s 59(2), that that section does not apply to a mortgage that is registered under the Transfer of Land Act. The draftsperson consequently seems to have assumed that the section would otherwise have applied to a mortgage of that kind.

63 It is also worth mentioning that s 67(4) of that Act provides that s 67(1) thereof, which deals with the effect, inter alia, of an advance on a joint account, applies, in the case of mortgages under the Transfer of Land Act, subject to certain provisions of that Act.

64 The least that might be drawn from this review of the provisions of Part VI of the Act is that there is nothing in that Part which should lead to the conclusion that its provisions, taken as a whole, are not intended to apply to land under the Transfer of Land Act. Rather, there are, as will be apparent from what I have said, some provisions which have quite plainly been drafted upon the assumption that they will have such application and at least one provision, s 57(1), which appears to have been drafted upon the assumption that it will not have such application, although there is, in that case, an inconsistency between the provision and s 108 of the Transfer of Land Act, leading to the operation of s 6(a) of the Property Law Act.

65 It is important to mention in this respect that there are significant differences between the Western Australian legislation and that considered, for example, by Justice Young in Yarrangah. Section 103(2) of the Conveyancing Act 1919 (NSW), considered in Yarrangah, is that which is broadly equivalent to s 55(2) of the Western Australian Property Law Act. It reads as follows:

"In any proceedings, whether for foreclosure, or for redemption, or for sale, or for the raising and payment in any manner of mortgage money or an amount secured by a charge, the Court, on the request of the mortgagee or person whose land is subject to the charge, or of any person interested either in the mortgage money or amount so secured or in the right of redemption, and notwithstanding the dissent of any other person, and notwithstanding that the mortgagee or person whose land is subject to the charge or any person so interested does not appear in the proceedings, and without allowing any time for redemption or for payment of any mortgage money or amount so secured, may direct a sale of the mortgaged or charged property on such terms as to the Court may seem just, including, if the Court thinks fit, the deposit in court of a reasonable sum fixed by the Court to meet the expenses of sale and to secure performance of the terms".

66 However, s 90 of the Conveyancing Act provides that the provisions of Div 1 of Part VII of that Act, being general provisions in respect of mortgages and certain charges (which provisions encompass s 103 of that Act), apply to and in respect of mortgages of and charges on land under the Real Property Act 1900 (the Torrens legislation in New South Wales) only to the extent specified in those provisions.

67 Moreover s 101(1) of that Act provides that:

"(1) Where mortgage money or an amount secured by a charge is secured partly by a mortgage or charge registered under the Real Property Act 1900 and partly by other securities:

(a) an order for foreclosure or sale, in respect of land the subject of the mortgage or charge, or

(b) an order for redemption, in respect of land the subject of the mortgage,

may, notwithstanding anything contained in that Act, be made by the Court as if the land was not under the provisions of that Act.

68 Also, s 103(7) of the Conveyancing Act provides that, except as provided by s 101 thereof, s 103 only applies to charges imposed under s 88F on land which is not under the provisions of the Real Property Act.

69 These provisions have been considered by Lee Aitken, in his article "Mortgagors' rights" (2000) 74 ALJ 226. The author says, at 227, after referring to s 90 and s 103(7) of the Conveyancing Act, that:

"It is not clear what this provision [s 103(7)] means. On one view, it simply means that the section applies with respect to charges imposed by the new s 88 regime only on Old System land. That is, it has nothing to say with respect to whether the broad power to sell is generally available for Torrens land, subject, of course, to the point made by Young J that such a notion would be contrary to the scheme of the Torrens legislation when dealing with foreclosure.

Against that proposition, it may be said that the other provisions of the Division make specific and inclusive reference to the Real Property Act, whereas s 103 does not. The matter is discussed in the standard work, Fisher and Lightwood's Law of Mortgage Taylor, Young and Croft (Eds) para 21.9, where the view is expressed that s 103 applies to 'unregistered mortgages of Torrens title land'.

In any event, as a matter of policy there seems to be no reason at all why the power of the mortgagee to sell Old System land should be subject to an application for a sale in court by the mortgagor on terms, whereas the same land under the Torrens System does not. The fact that the latter mortgage operates only as a 'security' but not a 'transfer' of the land can make no difference: Real Property Act s 58(1)."

70 I should also mention that in Victoria s 86 of the Property Law Act 1958 (Vic) provides that, except for specified sections, the provisions of Div 3 of that Act, which deal with mortgages and rentcharges, "shall not apply to mortgages under the Transfer of Land Act 1928 effected by instruments of mortgage under that Act". Section 91(2) of the Victorian Property Law Act, which is drafted in terms similar to s 55(2) of the Western Australian Act, is not one of the excepted sections.

71 These provisions find no counterpart in the Western Australian legislation (and it is perhaps worth noting that this is so notwithstanding that the Property Law Act in this State seems largely to have been based upon the Victorian Act). Rather, as I have said, it follows from the terms of s 6(a) of the Property Law Act (and, to a lesser extent, from the definition of "mortgage", "mortgagee" and "mortgagor" in s 7) that the provisions of that Act, including those found in Part VI thereof, do apply to land that is under the provisions of the Transfer of Land Act except to the extent of any inconsistency with that Act or, of course, where there is express provision to the contrary.

72 It consequently seems to me that the question of the applicability, or otherwise, of s 55(2) to mortgages registered under the Transfer of Land Act is regulated solely by s 6(a) of the Property Law Act. That being so, the ultimate question is, as I have foreshadowed, whether or not that section is inconsistent with the provisions of the Transfer of Land Act and, if so, to what extent. I have already said that there is an inconsistency in the sense that the notion of an "action ... for foreclosure" is inappropriate in the context of land under the Transfer of Land Act but that the references to an "action ... for redemption", to a "person interested ... in the right of redemption" and to "an action ... for sale, or for the raising and payment in any manner of mortgage money" are capable of application to Torrens system land. However the question remains whether the power to order a sale of land subject to a mortgage registered under the Transfer of Land Act at the request of a "person interested ... in the right of redemption" is inconsistent with anything contained in the Transfer of Land Act.

73 Mr Solomon submitted in this respect that if, as he acknowledged to be the case, s 55 empowers the court to require a mortgagee to discharge a mortgage otherwise than on payment of the entire mortgage debt, this is a direct interference with the mortgagee's right, under the Transfer of Land Act, to obtain foreclosure in circumstances in which the mortgaged property is worth less than the mortgage debt, unless the mortgagee elects to discharge the mortgage on payment of the lesser sum. That being so, he submitted, it is inconsistent with that Act.

74 There is obvious force in that submission. However the answer to it appears to me to be that the power given by s 55(2) is one which is capable of operating subject to the right, given by the Transfer of Land Act, to a mortgagee to apply for an order for foreclosure. That right can, by virtue of the provisions of s 121 and s 122 of the Transfer of Land Act, only be exercised after default in payment which has continued for a period of six months and in circumstances in which the land mortgaged has been offered for sale at public auction and the amount of the highest bidding at such sale was not sufficient to satisfy the moneys secured by the mortgage together with the expenses occasioned by the sale or in which there was no bid (s 121). Moreover, even if these pre-requisites are satisfied the Commissioner of Titles may, by virtue of s 122, direct the Registrar to publish notices, once in each of three successive weeks, in a Perth newspaper offering the land for private sale and appoint a time, not less than one month from the date of the first of those publications, upon or after which the Registrar is to issue the order for foreclosure "unless in the interval a sufficient amount has been obtained by the sale of such land to satisfy the principal and interest moneys secured and all expenses occasioned by such sale and proceedings". It is consequently quite plain that the right is one of last resort, exercisable only in circumstances in which a sale cannot be achieved in the manner provided for by s 121 and s 122 at a price sufficient to satisfy what is payable to the mortgagee.

75 Consequently, if a court was to exercise its power of sale under s 55(2) of the Property Law Act only in circumstances in which it is clear that the proceeds of sale will be sufficient to satisfy the mortgagee's entitlement or where the sale is ordered to be conditional upon that result being achieved or in circumstances in which the mortgagee does not wish to apply for an order for foreclosure then there would be no inconsistency with the provisions of s 121 and s 122 of the Transfer of Land Act (there being no question of rights afforded to the mortgagee under those sections being defeated by an order for sale) and the power given by the section would, to that extent, be exercisable in respect of land falling under that Act.

76 I should say that, in any event, it seems to me that a court would, even absent any inconsistency, be unlikely to interfere in a case in which the mortgagee was actively proceeding to exercise its power of sale (as was the case even at common law, as to which see Cheltenham and Gloucester Plc v Krausz [1996] EWCA Civ 780; [1997] 1 WLR 1558 and Brewer v Square [1892] 2 Ch 111 at 115, discussed in Yarrangah, above, par [6] and cf Yarrangah itself, par [37]).

77 Mr Solomon also contended that s 55(7) of the Property Law Act, which provides that, for the purposes of that section, the court may, "in favour of a purchaser, make a vesting order conveying the mortgaged property ... subject or not to any encumbrance, as the court thinks fit ...", is inconsistent with the provisions of s 242(1)(a), (b) and (c) of the Transfer of Land Act. Those provisions provide as follows:

"(1)(a) Where by the operation of any statute or statutory or other power or by virtue of any vesting order of any court or Judge or an order appointing a person to convey or of a vesting declaration appointment or other assurance an interest in land under this Act being an interest capable of being registered is disposed of or created the registered proprietor shall subject to proper provision being made for payment of costs, be bound to give effect to the disposition.

(b) If the registered proprietor is unable or refuses to make the requisite transfer or other disposition under this Act or cannot be found or if for any other reason a transfer or other disposition by him under this Act cannot be obtained within a reasonable time then the Registrar upon the direction of the Commissioner may give effect thereto in the Register by making an entry therein containing such particulars relating to such disposition as he may consider necessary.

(c) The disposition shall take effect in like manner as nearly as may be as if it had been made by the registered proprietor by transfer or other registered disposition:

Provided that nothing in this subsection shall prejudicially affect the rights of a personal representative in relation to the estate of the deceased".

78 I am, with due respect, unable to discern any conflict between the provisions of s 242 and those of s 55(7). Rather, as it seems to me, s 242(1)(a) is consistent with the power given in s 55(7) in that it refers not only to dispositions by the operation of "any statute", but also to dispositions by the operation of "any ... statutory or other power or by virtue of any vesting order of any court or Judge".

79 Mr Solomon also referred to s 242(3), which provides that s 242 shall not apply "in those cases in which other provision has been made for giving effect in the Register to any disposition". He suggested that, in the case of mortgages, there is "other provision" in the form of s 123 of the Transfer of Land Act which provides inter alia that, upon production of a memorandum, signed by the mortgagee, discharging land from the whole or part of the moneys secured, the Registrar shall make an entry in the Register giving effect to the discharge. He submitted that s 242(1)(c) and s 242(3), when read together, make it plain that no transfer by the registered proprietor can ever be registered except subject to a discharge of the mortgage or subject to the mortgage itself.

80 I am not persuaded that that is the effect of the two sections upon which he relied. Rather, it seems to me, the provisions of s 242(1)(c) are simply designed to ensure that the disposition provided for by s 242(1)(a) will be given as full an effect as possible and that s 242(3) is designed to cater for the prospect that the legislative enactments or orders referred to in s 242(1)(a) might make their own provision "for giving effect in the Register to any disposition".

81 It follows from what I have said that I consider that s 55(2) of the Property Law Act is capable of operating in respect of land under the Transfer of Land Act in an action such as the present in which the person interested in the right of redemption (as that expression has come to be used in the context of Torrens system land) seeks an order for the sale of land mortgaged under the provisions of the Transfer of Land Act, so long as the court is satisfied that there is no prospect that the mortgagee will thereby lose the right, which it might otherwise have exercised, to obtain an order for foreclosure under the provisions of the Transfer of Land Act.

82 There are, moreover, sound policy reasons why the legislature might have intended this result. It is difficult to see why the important statutory right conferred by s 55(2) (and I have stressed the remedial nature of that provision and the fact that it was enacted long after the enactment of the Transfer of Land Act) should be afforded only to mortgagors of old system land. Rather, as has been pointed out by Aitken, above, there are good reasons why it should be applicable to Torrens system mortgages also.

83 It follows from these conclusions, that the plaintiffs are able to rely upon s 55(2) if I can be satisfied that an order for sale will not defeat a right of foreclosure which might otherwise be exercised by the mortgagees. It seems to me that I can be satisfied of this. It seems plain, as I have said, that the proposed sale will realise more than enough to satisfy the entitlement of the mortgagees under the mortgage. Also, I have mentioned that all parties, including those represented by Mr Solomon, support a sale of the property at the proposed price. None of the mortgagees has expressed any desire to exercise a right of foreclosure even if that possibility had been open to them and, indeed, it would be surprising, to say the least, if the mortgagees were collectively to express such a desire in circumstances in which there are no less than 108 of them listed on the mortgage and in which the best prospect of a satisfactory return is undoubtedly that raised by a sale at the price which has been proposed.

84 It follows, also, that it is unnecessary for me to consider the third, and last, of the possibilities mentioned by counsel for the plaintiffs, being that arising from the judgment of Young J in Yarrangah (above), to the effect that the court has an inherent jurisdiction, in the case of Torrens system land, to make orders of the kind empowered by s 55(2) of the Property Law Act.

85 That brings me, finally, to the question whether I should exercise the very wide discretion afforded me by s 55(2) (as to which see Yarrangah, above, par [4], and the cases there mentioned) and, if so, upon what conditions.

86 The factors favouring a sale of the property upon terms of the kind suggested by the plaintiffs are, in my opinion, overwhelming.

87 It must be apparent from what I have said, at the outset of these reasons, that the affairs of Rowena and its related entities are in a state of utter confusion and that the various claims and counterclaims of those persons who have, or claim to have security over the vineyard land will take many months, or even years, to investigate, evaluate and, if necessary, clarify by way of court proceedings. If the vineyard land and the management rights are not sold sooner rather than later, the vineyard will, on the affidavit evidence before me, fall into a state of disrepair, leading to a significant diminution in the value of the vineyard land, and the management rights will become valueless. It also seems, from that evidence, to be almost inevitable that the proposed sales to Frankland Valley will fall through if an order for sale of the vineyard land is not made. Those sales are, as I have said, conditional upon such an order being made and, as I have also said, Frankland Valley seems unlikely to continue to fund the maintenance of the vineyard for much longer. Should the mortgagees themselves attempt to exercise their power of sale there is every prospect that some, at least, of the competing claimants to whom I have referred will endeavour to stop them from doing so except in circumstances in which the sale proceeds are to be held in trust or paid into court pending the resolution of their claims. So much is plain from the affidavit evidence before me and from what was said to me by counsel for the plaintiffs, counsel for one of the second claimants (Toplodge Nominees Pty Ltd), counsel for the third claimant and counsel for the fourth and fifth claimants. The delay which will be inherent in that process, even if the attempts to stop a sale of that kind are unsuccessful, may well result in the deterioration of the vineyard and the loss of the value of the management rights.

88 In these circumstances it seems to me to be quite plainly in the interests of the body of creditors of Sandgate, taken as a whole, that the proposed sales of the vineyard land and the associated management rights should proceed.

89 If the sales go ahead the net proceeds will be held on trust for those who ultimately succeed in establishing their claims to it. If the registered mortgagees represented by Mr Solomon prove to be right in their contentions that they and the other registered mortgagees are entitled to first call on those proceeds there will, as I have said, be enough to pay them out, albeit they may have to wait some time before receiving their money. While I accept that this is a less than desirable state of affairs, and that real hardship may be caused to some, at least, of them as a consequence, this seems to me to be by far the lesser of two evils.

90 In all of these circumstances it seems to me that I should direct that there be a sale of the vineyard land as proposed and that the net proceeds of sale be paid into court, or be otherwise held on trust, upon terms that persons who are able to establish an interest in the vineyard land should be entitled to a like interest in the net proceeds of sale thereof and that I should also direct that the injunction made on 30 September 1999 be discharged to the extent necessary in order to enable these orders to take effect.

91 I will hear further from the parties as to the precise terms of the orders which should be made and as regards the need for any ancillary orders.

Saffioti, Mario Carmello As Trustee for the Saffioti Family Superannuation Fund