This was an application for discharge of order under s 27 of the Judgment Creditors’ Remedies Act 1901.
The applicant, Toni Rogers, moved on notice for an order pursuant to s 32 of the Judgment Creditors’ Remedies Act 1901 (the Act) discharging the order made pursuant to s 27(1) of the Act by Acting Deputy Registrar.
The applicant and her husband, Gordon Rogers, were the registered proprietors of the property known as Te Mata. They were tenants in common in equal shares. Gordon Rogers’ interest was the subject of a registered mortgage in favour of the applicant. Te Mata was Torrens system land under the Real Property Act 1900.
The respondent Wentworth was the judgment creditor of Gordon John Rogers. The judgment debt was outstanding at the date of the making of the order and remained so for this application. The respondent applied to the Court pursuant to s 27(1) of the Act, and Pt 47 of the Supreme Court Rules 1970 (the SCR), for an order that the interest of Gordon Rogers in Te Mata stand charged with the payment of the amount for which judgment had been recovered. The Registrar delivered a favourable judgment:
“The interest of Gordon Rogers comprising the property Te Mata, at Upper Moore Creek Road, Tamworth in the State of New South Wales, being Folio Identifier 71/615640 stand charged with an order pursuant to section 27 of the Judgment Creditors’ Remedies Act 1901.” (the charging order)
The applicant contended that the charging order was not authorised by s 27 of the Act. The respondent did not concede this and said that in any event the applicant was without standing to challenge it.
The applicant submitted that she had a statutory entitlement to apply for the discharge of the order under s 32 of the Act. Section 32 provides:
“32 Discharging or varying order
The Supreme Court or a Judge of the District Court, as the case may be, may upon the application of the judgment debtor or any person interested discharge or vary such order and award such costs upon such application as the Supreme Court or the Judge of the District Court, as the case may be, thinks fit.”
The applicant’s Counsel was critical of the order as it was not specific. Neverthless, the Court held it was clear that the order attached only to the interest of Gordon Rogers in Te Mata. He held an undivided equal share in Te Mata and it was this share that is the subject of the respondent’s charge.
The applicant was the registered lender of Gordon Roger’s undivided equal share in Te Mata. Her mortgage had priority over the respondent’s charge.
The applicant’s counsel submitted the applicant to be a “person interested” in the discharge of the charging order because it was said to interfere with the applicant’s capacity to further charge or mortgage Te Mata in order to raise funds. The Court did not accept this. It was open to the applicant to raise funds on the security of her undivided equal share in the property.
Counsel placed greater emphasis on the contention that the charging order could be employed on the sale of Te Mata to frustrate or delay the applicant’s receipt of the proceeds of sale.
Section 66F of the Conveyancing Act 1919 defines co-ownership for the purposes of Div 6 of Pt 4, which deals with statutory trusts of property held in co-ownership, to mean ownership whether at law or in equity in possession by two or more persons as joint tenants or as tenants in common; and co-owner is given a corresponding meaning and includes an incumbrancer of the interest of a joint tenant or a tenant in common. Incumbrance is defined to include a charge of a portion and incumbrancee is given a meaning corresponding with that of incumbrance and includes every person entitled to the benefit of an incumbrance.
Provision is made in s 66G Conveyancing Act 1919 for the court on application by any one or more of the co-owners to appoint trustees and to vest the co-owned property in them on a statutory trust for sale or for partition. It would seem that a chargee under a charge given by a co-owner may be a co-owner for the purposes of Div 6 of Pt 4 of the Conveyancing Act.
The court said the respondent may exercise rights having an effect on the interest of the applicant both as tenant in common of Te Mata and as the lender of Gordon Roger’s interest in it. The appointment of trustees for sale would convert the applicant’s interest in each case into money.
The applicant was held to be a “person interested” for the purposes of s 32 of the Act.
Section 27 of the Act provides a:
“27 Order charging stock shares and equities
1. If a judgment debtor under a judgment of the Supreme Court or a District Court:
- has any stock or shares of or in any public company (whether incorporated or not), or any deposit in any bank, building society or credit union in New South Wales, standing in the judgment debtors name in the judgment debtors in each instance’s own right, or in the name of any person in trust for the judgment debtor; or
- has or is entitled to any equity of redemption or other equitable interest, the Supreme Court or a judge of the District Court, as the case may be, on the application of the judgment creditor may order that such stock shares or deposit, or such equity of redemption or equitable interest, or such of them or such part thereof respectively as the Supreme Court or the judge of the District Court, as the case may be, thinks fit, shall stand charged with the payment of the amount for which judgment has been so recovered and interest thereon.
2. Such order shall entitle the judgment creditor to all such remedies as the judgment creditor would have been entitled to if such charge had been made in the judgment creditor’s favour by the judgment debtor.
3. Provided that no proceedings shall be taken to have the benefit of such charge until after the expiration of three months from the date of such order.”
In Quint v Robertson (1985) 3 NSWLR 398 Young J considered whether the interest of a borrower under Torrens system land is an “equity of redemption” within the meaning of s 27(1) of the Act. His Honour concluded that it was neither an equity of redemption nor an equitable interest for the purposes of the provision. The interest of the borrower under Torrens system land is a legal interest that is the subject of a charge. His Honour observed that the equity that a borrower of Torrens System land has – to pay off the mortgage and have the lender give a discharge – is not an equity of redemption for the purposes of s 27 of the Act. In this context his Honour said:
“The plaintiff does not seek to charge, nor could it, the defendant’s right to approach this Court to redeem his mortgage, what the plaintiff seeks to have charged is the legal estate in the land which the defendant has which, in my view, cannot be described as an equity of redemption”.
In DM and BP Wiskich Pty Ltd v Saadi (unreported) NSWSC 16 February 1996 Bryson J followed Quint and observed:
“On the face of s 27 of the Judgment Creditors’ Remedies Act 1901 it might be thought that an order can be made by the Court giving a judgment creditor a charge over the interest of the judgment debtors. However the interest which may be charged under s 27(1) is an equity of redemption or equitable interest. Those expressions while very commonly used in relation to the interest of a registered proprietor of land under the Torrens system who has given a registered mortgage, are not strictly accurate, as they would be for the interest of a mortgagor who holds title under the general law or Old System. S 27 is traceable through a consolidation statute to legislation enacted in 1841 before the Torrens systems and its form of mortgage existed. The history was traced by Young J in Quint v Robertson (1985) 3 NSWLR 398, where his Honour held that a mortgagor’s interest under the Real Property Act 1900 is not an equity of redemption within the meaning of the Judgment Creditors’ Remedies Act 1901. It follows from that decision that there is no statutory authority for the Court to grant the judgment creditor in this case a charge over the land. It may be that this is a subject on which law reform could be considered.”
The respondent submitted that the court should decline to follow the decisions in Quint and Wiskich. In her submission the earlier decision in Australia & New Zealand Banking Group Ltd v Greig  1 NSWLR 112 correctly stated the law. In that case Master Allen concluded that the estate of a borrower of land under the Real Property Act is an “equity of redemption or other equitable interest” for the purposes of s 27 (1)(b) of the Act.
The respondent relied on the decision of Holmes J in Worrell v Issitch  QSC 146 which was submitted to have followed Grieg. It is to be observed that Holmes J was not dealing with the point that is in issue in these proceedings. His Honour noted that the views expressed by the authors of Sykes and Walker, the Law of Securities, 5th ed, at p19 to the effect that a charging order confers a “proprietary” interest on the creditor had been adopted by Master Allen in Grieg (Grieg, at 118) and that he was also inclined to consider them to be correct. His Honour did not refer Quint or Wiskich.
In Quint Young J gave consideration to the decision of Master Allen in Grieg, observing that normally he would follow the decision just as he would follow a decision of a judge of this Court. His Honour explained that there were three reasons why he had concluded that it was necessary to examine the matter again. The first was that Master Allen had considered himself to be bound by the decision of Faucett APJ in Coleman v De Lissa (1885) 6 LR(NSW) Eq 104, albeit that he followed it with expressed reluctance. Of Coleman, Young J observed that, “The learned Master’s reluctance is quite evident when one examines the decision of Faucett APJ” (at 399). His Honour analysed Coleman and the legislative history of s 27 of the Act and concluded that there was no good reason why the words “equity of redemption” should be given some special and extraodinary meaning for the purposes of s 27 of the Act. His Honour was of the opinion that there were very sound reasons for not following Grieg.
Quint has since been followed by Bryson J. While not bound by the decisions in Quint and Wiskich the Court said it was appropriate to follow them unless they were wrong, which it did not find.
The interest of Gordon Rogers in Te Mata was neither an equity of redemption nor an equitable interest for the purposes of s 27(1)(b) of the Act. The Court discharged the order made by the Registrar.