H. C. OF A. 1907. FINK V. ROBERTSON. The defendant now appealed to the High Court. Weigall K.C. and Starke, for the appellant. The right which, under the law existing prior to the Transfer of Land Acts, a mortgagee had after foreclosure to sue on the covenants in the mortgage, and thus to re-open the mortgage is inconsistent with the provisions of those Acts, and, as to land under those Acts, does not exist. As to the rights of the mortgagor and the mortgagee after foreclosure, see Lockhart v. Hardy (1); Campbell v. Holyland (2); Kinnaird v. Trollope (3). The intention of the Transfer of Land Acts is by foreclosure to put the mortgagor and mortgagee in the same position as if the mortgagor had conveyed the land and the equity of redemption to the mortgagee. Since under those Acts the legal estate does not pass to the mortgagee, there is in fact no such thing as an equity of redemption. By Sec. 130 of the Transfer of Land Act 1890 the mortgagee, upon foreclosure, is to be deemed to be the transferree of the mortgaged land, that is, the transferree from the mortgagor, and by virtue of sec. 95, the transferree of mortgaged land is bound to indemnify the transferror against all liability in respect of the mortgage debt. Foreclosure under the Act therefore operates as an extinguishment of the debt. The same result follows if the mortgagee after foreclosure is to be treated as a transferree of the land free from the mortgage, for by sec. 89 the transferree is to be liable for all the liabilities to which he would have been liable if he had been the former proprietor. So under sec. 121 a covenant is implied in the mortgage that the transferree of the mortgagor will pay the mortgage debt. That covenant runs with the land: In re Burton; Ex parte Union Bank of Australia Ltd. (4), disapproving of Australian Deposit and Mortgage Bank v. Lord (5). So that, in any one of those views, as soon as Robertson became registered proprietor of the land, the mortgage debt became extinguished. [HIGGINS J.-What more does sec. 130 provide as to a foreclosure than was provided by a decree in equity for foreclosure ?] The decree did not mean what it said, but the words of the (1) 9 Beav., 349. (4) 27 V.L.R., 437. at p. 442; 23 A.L.T., 114, per Holroyd J. (5) 2 V.L.R. (L.), 31. section must be interpreted to mean what they say. No machinery is provided by the Act for re-opening a foreclosure. Under the Real Property Acts of New South Wales it has been held that there is no power to re-open a foreclosure: Campbell v. Bank of New South Wales (1); Matton v. Lipscomb (2). The words of sec. 114 of the Real Property Act 1863 of New South Wales are not so strong as those of sec. 130 of the Transfer of Land Act 1890. A foreclosure order under sec. 130 operates as a vesting order which vests in the mortgagee the land of the mortgagor as if it had been transferred by the mortgagor to the mortgagee, and it vests the land as it existed at the date of the mortgage. Thus, in the case of a second mortgage, on a foreclosure order, the second mortgagee would be registered as having the estate of the mortgagor as at the time the second mortgage was granted, and the second mortgagee would therefore have to indemnify the mortgagor against the first mortgage debt. Similar words to the words "shall be deemed a transferree" in sec. 130, are used in other sections with a similar object: See secs. 118 and 188. If the view is taken that a mortgagee who forecloses takes the land with the burdens which existed at the time of the registration of the mortgage, the Act works out scientifically. Sec. 124 also bears out this view. The first part of it provides for the somewhat anomalous position into which mortgagor and mortgagee have been put by the Act, giving certain rights and remedies to the mortgagee, and then the second part is a proviso that, when after foreclosure the mortgagee has become proprietor of the land, none of his rights or liabilities incident to his new ownership are to be affected by the previous part of the section. [Counsel also referred to Bridgman v. Daw (3); Adair v. Carden (4); Ashburner on Mortgages, p. 374; Ex parte National Trustees, Executors and Agency Co. of Australia Ltd. (5); Registrar of Titles v. Paterson (6); Trust and Agency Co. v. Markwell (7); Greig v. Watson (8); Canaway's Real Property Act, p. 99; In re Premier Permanent Building, Land and (1) 16 N.S. W. L.R. (Eq.), 285; 11 App. Cas., 192. (2) 16 N.S. W. L. R. (Eq.), 142. (3) 40 W.R., 253. (4) 29 L.R. Ir., 469. (5) 19 A.L.T., 222. (6) 2 App. Cas., 110. (7) 4 Qd. S.C.R., 50. (8) 7 V. L. R. (Eq.), 79 ; 3 A.L. T., 13. H. C. OF A. 1907. FINK 2. ROBERTSON. 1907. H. C. OF A. Investment Association, Er parte Lyell (1); Waring v. Ward (2); Bell v. Rowe (3); Weigall v. Gascon (4); Conveyancing Act 1905, sec. 36.] FINK v. ROBERTSON. As to the question of the limitation of the action by reason of the Transfer of Land Act 1890, sec. 92, and the Real Property Act 1890, secs. 47, 49, counsel referred to 3 & 4 Will. IV. c. 83; 21 Jac. I. c. 63; Kelly v. Fuller (5); Payne v. The King (6); In re Currie (7); Cooper v. Cooper (8); Carson's Real Property Statutes, p. 211; Hunter v. Nockolds (9); Sutton v. Sutton (10); In re Frisby; Allison v. Frisby (11); Kirkland v. Peatfield (12). Mitchell K.C. and Guest, for the respondents. The Transfer of Land Act makes no alteration in the law of foreclosure. Sec. 130 merely provides a simple and expeditious way of giving to the mortgagee the same right to obtain which, without the section, he would have had to bring a suit: In re Premier Permanent Building, Land and Investment Association; Ex parte Lyell (1). The legislature has, in sec. 130, followed very closely the ordinary form of a decree for foreclosure: Seton on Decrees, 1st ed., p. 211; Frail v. Ellis (13); Seton on Decrees, 6th ed., vol. III., p. 1992. The ordinary position of a mortgagee is that, notwithstanding he has foreclosed, he can still pursue his personal remedy against his debtor, subject only to this, that he must be in a position to give back the whole property mortgaged: Perry v. Barker (14). Secs. 129 and 130 are merely machinery sections, and are not intended to alter the law, except so far as it is inconsistent with that machinery. They are skeleton sections, and the Court must fill them in so as to provide for cases that may arise under them. Ex parte National Trustees Executors and Agency Co. of Australia Ltd. (15). Sec. 124 is very strong to show that sec. 130 was not intended to take away the right of a mortgagee after foreclosure to sue on the covenants, for after providing that a mortgagee is to have certain rights, lest it should be con (1) 25 V.L.R., 77; 21 A.L.T., 67. (3) 26 V.L. R., 511; 22 A. L.T., 156. (4) 3 V.L.R. (L.), 294. (5) 1 S.A. L R., 15. (6) (1902) A.C., 552. (7) 25 V.L.R., 224, at p. 227; 21 A. L.T., 127. (S) 26 V.L.R., 649; 22 A.L.T., 215. (9) 1 Mac. & G., 640, at p. 650. (10) 22 Ch. D., 511. (11) 43 Ch. D., 106, at p. 110. (12) (1903) 1 K.B., 756, (13) 16 Beav., 350. (14) 8 Ves., 527; 13 Ves., 198. tended that the giving of those rights until foreclosure was intended to mean that the mortgagee was not to have any rights against the mortgagor after foreclosure, the proviso was put in that the rights of the mortgagee after foreclosure were not to be affected. [HIGGINS J. as to those rights referred to Farrington v. Smith (1); Commercial Bank v. Breen (2).] One result of the contrary view would be that, if to secure a large debt several mortgages over different pieces of land were given, if the mortgagee foreclosed one of the mortgages the whole debt would be gone. In that view sec. 130 would be a trap for mortgagees. There was no intention to put mortgagees to their election. The provisions in secs. 113 to 130 relating to mortgages contain inherent evidence that the remedies of the mortgagee are cumulative and independent, and are not to be exclusive of one another. Those remedies may be pursued until the debt is paid. There are cases in which the foreclosure must be re-opened, e.g., in case of fraud, and means must be found for re-opening it. [Counsel also referred on this point to James v. James (3); Pryce v. Bury (4); Lees v. Fisher (5); Sadler v. Worley (6); In re Kelday; Ex parte Meston (7); Real Property Act 1861 (Queensland) sec. 60; Power's Real Property Acts of Queensland, p. 86; Hogg's Australian Torrens Acts, p. 942; Bucknall v. Reid (8); Seton on Decrees, 6th ed., pp. 1,912, 1,996, 2,042; Kinnaird v. Trollope (9); Dixon v. Wigram (10); Stevens v. Theatres Limited (11); British South Africa Co. v. Companhia de Moçambique (12). As to the question of limitation they referred to Torrens Australasian Digest, col. 206; Kelly v. Fuller (13); Sinclair v. Gumpertz (14); Flanagan v. Bladen (15); In re Currie (16); Payne v. The Queen (17); Cork and Bandon Railway Co. v. Goode (18); In re Cornwall Minerals Railway Co. H. C. OF A. (1); Paget v. Foley (2); Sims v. Thomas (3); Coote on Mortgages, 7th ed., p. 9.] 1907. Weigall K.C., in reply. Apart from the Transfer of Land Act, there was much complicated law as to foreclosure and much authority to the effect that after foreclosure a mortgagee could sue upon the covenants, though there was much question as to the terms upon which he could sue. The Act should therefore be treated apart from that law and those authorities. The Act contemplates that upon foreclosure of a particular instrument the rights under it are gone. It is also the policy of the Act to keep each title separate from all others. [HIGGINS J.-Is there anything in the Act which is inconsistent with the mortgagee suing on the covenants after foreclosure ?] Sec. 121 provides that the burden of a mortgage is to be borne by the mortgagor's transferree, and sec. 130 makes the mortgagee after foreclosure the owner as transferree. The burden created by the registered instrument always runs with the land, and when the instrument is removed, the burden is removed. [He also referred to Williams v. Hunt (4); Company of Tobacco-Pipe Makers v. Loder (5); Dyson v. Morris (6); Robbins on Mortgages, p. 1,003.] Cur, adv. vult. The judgment of GRIFFITH C.J., BARTON and O'Connor JJ., was read by GRIFFITH C.J. This was an action upon the covenants contained in an instrument of mortgage dated 18th March 1891, and duly registered pursuant to the Transfer of Land Act 1890. The defendant, with other defences, pleaded that the mortgagee obtained under the provisions of that Act an order for foreclosure, in pursuance of which he was registered as proprietor of the mortgaged land, and thereupon became the transferree thereof, and that a certificate of title was issued to him, and contended that thereupon her obligations under the instrument of mortgage (1) (1897), 2 Ch., 74. (4) (1905) 1 K.B., 572. (5) 20 L.J. (N.S.) Q. B., 414, at p. 416. (6) 1 Hare, 413, at p. 418. |