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ACP Properties (Townsville) Pty Ltd v 11 Oonoonba Road Pty Ltd[2019] QDC 265

ACP Properties (Townsville) Pty Ltd v 11 Oonoonba Road Pty Ltd[2019] QDC 265



ACP Properties (Townsville) Pty Ltd v 11 Oonoonba Road Pty Ltd & Anor [2019] QDC 265



(Plaintiff / Applicant)


11 OONOONBA ROAD PTY LTD (ACN 615 776 148)

(First Defendant / Respondent)



(Second Defendant)



(First Third Party)



(Second Third Party)






Chamber application


Brisbane District Court


5 December 2019




18 October 2019


Richards DCJ


Application dismissed.


APPLICATION FOR SUMMARY JUDGMENT – PROPERTY – MORTGAGE – where the plaintiff and second third party companies are directed by the first third party – where the defendant alleges the second mortgage was fraudulently signed and registered by the second third party without their knowledge or consent – where the first ranking mortgage was paid out by and assigned to the plaintiff – where the second third party exercising power of sale as mortgagee transferred the property to the plaintiff  – whether the defendant has prospects of success in this claim – whether this application is premature pending resolution of other issues arising in this matter at trial


N H Ferrett QC for the plaintiff
L Copley for the first and second defendant


Archibald and Brown Lawyers for the plaintiff
Mobbs and Marr Legal for the first and second defendants

  1. [1]
    On 23 December 2016 ACP Properties (Qld) Pty Ltd and 11 Oonoonba Road Pty Ltd completed the purchase of the Townsville Transit Centre. They entered into a joint venture agreement to facilitate the purchase and development of the property. The agreement provided that Mr Campbell, the director of ACP Properties (Qld) Pty Ltd would lend Mr Edmonds, the director of 11 Oonoonba Road Pty Ltd, $1,350,000 to pay for his share of the property and $297,500 to complete some work on the property. It was agreed that to secure the loans, ACP Properties (Qld) Pty Ltd would take a first registered mortgage on the property. That mortgage was registered on 3 April 2017. The loan was initially to be repaid by 23 December 2017 but was later extended to 23 December 2018.
  1. [2]
    Mr Edmonds was unable to obtain finance to repay the loan so it was agreed to approach the NAB to obtain finance to refurbish the property. On 11 April 2018, NAB approved and issued loan documents for a facility for $1.6 million. The loan was provided to both companies with personal guarantees from Mr Edmonds and Mr Campbell. NAB would only agree to the facility if it held the first ranking registered mortgage on the property so the initial mortgage was released on 20 June 2018.
  1. [3]
    On 23 August 2018, ACP Properties (Qld) Pty Ltd registered a duplicate copy of the initial mortgage as a second mortgage. It was registered by in-house counsel for ACP Properties (Qld) Pty Ltd, Miss Reynolds. It is alleged that this second mortgage was registered without Mr Edmonds’ knowledge or consent.
  1. [4]
    On 3 December 2018, ACP Properties (Qld) Pty Ltd issued three notices of exercise of power of sale citing various defaults on the second mortgage. On 5 December 2018 the solicitors acting for the defendant wrote to solicitors acting for ACP Properties (Qld) Pty Ltd indicating that the second mortgage on the property had been improperly registered and to withdraw any purported exercise of power of sale.[1] The registration of the second mortgage from an early stage was very much in dispute. 
  1. [5]
    NAB entered into a deed of assignment of the NAB facilities to ACP Properties (Townsville) Pty Ltd in February of 2019. The assignment was said to have taken place upon payment of the debt as defined in the deed to be $460,210.70. On 9 May 2019 ACP Properties (Qld) Pty Ltd in its own right and as mortgagee exercising power of sale under the second mortgage signed a transfer document transferring the property to ACP Properties (Townsville) Pty Ltd for the sum of $2,730,000. That transfer was registered on 31 May 2019. None of the sale proceeds that were received by ACP Properties (Qld) Pty Ltd were used to discharge the first ranking mortgage. None of the funds were retained by the purchaser to discharge their first ranking mortgage.
  1. [6]
    Stephen Campbell is the sole director and secretary of ACP Properties (Qld) Pty Ltd, ACP properties (Townsville) Pty Ltd and ACP Holdings Pty Ltd.
  1. [7]
    The plaintiff submits the actions of ACP Properties (Qld) Pty Ltd do not affect the liability of the defendants in relation to the assigned mortgage from the National Australia Bank. Whether the proceeds of the sale of the property was applied incorrectly and whether the second mortgage was registered without authority is a matter of dispute between the defendants, Campbell and ACP Properties (Qld) Pty Ltd.
  1. [8]
    The defendant argues that firstly, the plaintiff paid out the debt to the National Australia Bank rather than taking an assignment of the debt because the property was transferred to it before the assignment took place. This argument depends on an argument that title to the property passed to the plaintiff on 9 May 2019 when the transfer documents indicate that the payment was made. There is material before me that indicates the date that payment was exchanged between the plaintiff and the second third party in the form of a settlement statement was 30 May 2019 when the transfer was registered however, given the close relationship of the companies involved in the transaction, the allegations of fraud and the fact that this document was signed by the sole director of both companies, it does not carry as much weight as it might otherwise. No doubt bank statements will resolve any uncertainty in this regard.
  1. [9]
    Secondly, the defendants claim that the second mortgage upon which the foreclosure was made was fraudulently registered. The registration of the mortgage was effected by Ms Reynolds, presumably acting on the direction of Mr Campbell. Mr Campbell and ACP Properties (Qld) Pty Ltd have been joined as third parties to the action, but they have not as yet filed defences. Essentially the defendants say the application is premature, because given the close relationship between the plaintiff and the third parties, it may be that the fraud allegations become relevant to the case against the plaintiff as well.
  1. [10]
    Thirdly, it is argued for the second defendant Mr Edmonds that the personal guarantee given by him for the loan was signed implicit in the knowledge that there was a first registered mortgage over the property which easily covered the value of the property. It is submitted that the guarantee was voided by the actions of the assigned mortgagor who, bought the property in full knowledge of the first mortgage that it held but then did not press its rights over the vendor in circumstances where the vendor had full knowledge of the first registered mortgage and the allegations of fraud in relation to the second mortgage.
  1. [11]
    In this case, while the plaintiff is a different entity to the first and second third parties, it cannot be ignored that the companies are related and that the sole director of both companies is the first third party. Neither can it be ignored that the plaintiff subverted its own rights under the first registered mortgage to pay the second third party the full sum of the purchase price agreed. Whilst it is by no means certain, there is an arguable case that the ownership of the property may have passed before the assignment of the lease. It may also transpire that the fraud allegations may bear on the legitimacy of the claim of the plaintiff.
  1. [12]
    In my view, having regard to the matters raised by the defendants, that at the very least this application is premature. The application is dismissed.


[1] Affidavit of Kendall Bocos ex KKB4


Editorial Notes

  • Published Case Name:

    ACP Properties (Townsville) Pty Ltd v 11 Oonoonba Road Pty Ltd & Anor

  • Shortened Case Name:

    ACP Properties (Townsville) Pty Ltd v 11 Oonoonba Road Pty Ltd

  • MNC:

    [2019] QDC 265

  • Court:


  • Judge(s):

    Richards DCJ

  • Date:

    05 Dec 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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