The Presbyterian Church (NSW) Property Trust v Scots Church Development [2007] NSWSC 676

In this case the Presbyterian Church sold the site on the corner of York & Margaret Street to Westpoint. The agreement was that Westpoint would build a 12 levels of residential strata units on top and renovate the Church before reconveying the “Church lot” back to Presbyterian Church. Westpoint took out a first mortgage with Capital Finance Australia Ltd and then raised $108,000,000 by means of promissory notes which it secured with a second mortgage over the whole site. Westpoint went into liquidation and the Presbyterian Church sought a transfer of the “Church lot” back unencumbered from the liquidators of the second mortgagee (which was refused). After upholding the indefeasibility of the second mortgage Justice Peter Young (Chief Judge in Equity) held it would be unjust based on Ex Parte James for the liquidator to refuse to allow the transfer the Church lot back to the Presbyterian Church unencumbered.

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