"On Wednesday 12 May 2010 Mr Justice Forrest delivered judgment, in the Supreme Court of Victoria, in favour of Balanced Securities Limited (BSL) in the case of Balanced Securities Limited -v- Bianco & Ors [2010] VSC 162. BSL was represented by Herbert Geer's CDR team in Melbourne.
The decision of Mr Justice Forrest represented a important win for BSL, a major client of the firm, in a longstanding dispute between it (as first mortgagee of units in a residential development in Prahran) and tenants claiming an entitlement to possession of one of the units in the development.
The key dispute in the case turned on the tenants' claim that they had a proprietary interest in the unit, paramount to the interests of BSL (as first mortgagee), pursuant to an exception to BSL's indefeasibility of title contained in section 42(2)(e) of the Transfer of Land Act 1958 (Vic) (the TLA).
The tenants argued, in this regard, that they took their tenancy whilst BSL's mortgage remained unregistered and the indefeasibility provisions of section 42 of the TLA meant that a mortgagee only took paramount title upon registration of the mortgage, subject to any existing tenancy.
On behalf of BSL it was argued that the relevant time to assess competing rights under the TLA, as between tenant and mortgagee, was at the time of creation of the mortgage (e.g. when mortgage documents were signed and money exchanged), not its registration. The mortgage was created before the tenants came into possession and, accordingly, gave BSL priority.
His Honour preferred the arguments put on behalf of BSL and awarded it possession of the unit, damages and costs.
Author: Andrew Mariadason