Cameron v Arcobaleno Pty Ltd[2024] QSC 111

SUPREME COURT OF QUEENSLAND

1. [1]
   At the time this application was heard:

   1. the applicant was the registered owner of a one-half interest in land at 337 Teewah Beach Road, Noosa North Shore, more fully described as Lot 1728, Crown Plan M37789, Title Reference 12376116 (Land) as tenants in common with the second respondents;
   2. the second respondents were each the registered owner of a one-quarter interest in the Land;
   3. the first respondent held mortgage no. 601640125 (Mortgage) which was registered on the title to the Land;
   4. statutory trustees for the sale of the Land had been appointed pursuant to s 38 of the Property Law Act 1974 (Qld) upon an application by the second respondents: see Malouf & Anor v Cameron [2024] QSC 3.
2. [2]
   The applicant’s interest in the land was transferred to her from her former husband pursuant to orders made by the Family Court of Australia and the Full Court of the Family Court of Australia.  That transfer took effect on 21 February 2002.
3. [3]
   The Mortgage was originally held by National Bank of Australasia Ltd (now National Australia Bank Ltd) (NAB) and secured a debt owed to it by previous co-owners of the Land.  NAB transferred the Mortgage to the first respondent in 1999.
4. [4]
   The applicant contends that, following its transfer from NAB to the first respondent, the Mortgage ceased to secure any debt and should be removed from the title.  In the alternative, she contends that any claim by the first respondent for payment of any monies owed under the Mortgage is statute-barred.
5. [5]
   As to the effect of the Mortgage, the respondents contend that:

   1. a deed of covenant dated 26 May 1999 between NAB and the first respondent (Deed) assigned to the first respondent, among other things, the right under the Mortgage to recover the NAB debt;
   2. after the transfer of the Mortgage and the assignment of the right under the Mortgage to recover the NAB debt to the first respondent in 1999, the Mortgage continued to secure the first respondent’s right to recover the NAB debt;
   3. after the transfer of the half-interest in the land to the applicant in 2002, the applicant became liable to comply with the terms of the Mortgage, including the obligation to repay the NAB debt.
6. [6]
   The respondents also resist the application for relief consequent upon the expiry of a relevant limitation period.
7. [7]
   For the reasons that follow, the applicant’s claim for declarations and for an order requiring that the first respondent release the Mortgage is dismissed.

Relevant dealings with the Land and the Mortgage

8. [8]
   The Land was purchased in 1979 by a group of people as tenants in common holding the following interests:

   1. Ian Cameron (the applicant’s former husband) – one half;
   2. Kay Cohen – one sixth;
   3. Janice Herron – one sixth;
   4. Eleanore Watson – one sixth.
9. [9]
   On 15 April 1980, those original co-owners obtained an overdraft facility with NAB which was secured by the Mortgage.  The Mortgage was registered on 17 April 1980. 
10. [10]
    It appears that by early 1998, NAB had commenced taking steps to recover the amount owed to it under the overdraft facility.  On 5 February 1998, NAB wrote to Ms Herron confirming approval of an overdraft facility with a reduced limit of $104,000.  That facility was required to be repaid by 28 February 1998.  NAB stated in the letter to Ms Herron that failure to repay the facility in full by that date would mean the bank would continue with recovery action.
11. [11]
    Thereafter the original co-owners, with the exception of Mr Cameron, repaid the proportion of the debt owed under the overdraft facility.  In those circumstances, NAB threatened to sell the Land.
12. [12]
    The first respondent was incorporated by Ms Cohen, Ms Herron and Sharon Pie on 3 February 1999.
13. [13]
    On 26 May 1999, the Deed was executed and the Mortgage was transferred to the first respondent.  The transfer form lodged for registration recorded the consideration for the transfer of the Mortgage being the sum of $120,276.00.
14. [14]
    On 27 May 1999, NAB wrote to each of the original co-owners of the Land and certified, pursuant to cl 34 of the Mortgage, that the total moneys and liabilities secured by the Mortgage as at that date was the sum of $120,276.00.
15. [15]
    As already noted, Mr Cameron’s half interest in the Land was transferred to the applicant on 21 February 2002.
16. [16]
    Upon Ms Watson’s death, her one sixth interest in the Land was transferred to Ms Pie in 2015.
17. [17]
    On 6 April 2021, the applicant filed an application seeking the appointment of statutory trustees for sale of the Land pursuant to s 38 of the Property Law Act.  The applicant subsequently discontinued that application after Ms Cohen, Ms Herron and Ms Pie agreed to sell the Land.  The Land was offered for sale by public auction in 2022 but did not sell.
18. [18]
    In 2023, the second respondents acquired the interests of Ms Cohen, Ms Herron and Ms Pie in the Land.  They also acquired all the shares in the first respondent.

Terms of the Mortgage

19. [19]
    Under the Mortgage, the original co-owners of the Land were obliged to:

    1. “… pay to the Bank on demand in writing all moneys which are now or may from time to time hereafter be owing or remain unpaid to the Bank in any manner or on any account whatsoever by the Mortgagor …” (cl 1);
    2. “… pay interest to the Bank on all moneys for the time being owing or remaining unpaid as aforesaid at the rate charged by the Bank from time to time upon overdrawn accounts computed as from the day or respective days of the same respectively becoming owing … all such interest as aforesaid to be considered accruing from day to day and to be payable as and when demanded …” (cl 2).
20. [20]
    Clause 33 further provided:

“The moneys and liabilities secured by this Mortgage at any time and from time to time include all amounts which are at any time presently owing and payable, AND all amounts which

3. (i)
   are at any time and from time to time owing but not then presently payable;

3. (ii)
   are at any time and from time to time owing upon a contingency;

3. (iii)
   at any time and from time to time may become owing or for which the Bank may become liable by reason wholly or partly of past events or by reason of anything done or omitted by the Bank, the Mortgagor or the Principal;

3. (iv)
   at any time and from time to time may reasonably foreseeably become owing on any account or in any manner whatsoever whether by reason of the relation of banker and customer or by operation of law or in equity or otherwise by reason of anything done by the Bank with the consent or at the request of the Mortgagor or the Principal;

all such monies being due or becoming due or to become due or which may become due as aforesaid by the Mortgagor or the Principal to the Bank.”

21. [21]
    The certificate of any officer of the Bank as to any amounts falling within any of the items of secured moneys was stated to be conclusive evidence of the amount of each such item and binding on the Mortgagor (cl 34).
22. [22]
    The reference in the Mortgage to “the Bank” included NAB’s transferees (cl 30).

Terms of the Deed

23. [23]
    The recitals to the Deed relevantly recorded:

    1. NAB had given notice of default to the Mortgagors (recital B) and notice of its intention to exercise its power of sale of the Land because of the continuing default of the Mortgagors (recital C);
    2. the first respondent had offered to purchase NAB’s interest in the Mortgage, subject to the execution and completion of the terms of the Deed.
24. [24]
    The Deed then provided by cl 1:

“The [first respondent] agrees to purchase and the Bank agrees to transfer to the [first respondent] all of the Banks [sic] interest, rights and previleges [sic] as Mortgagee under that mortgage.”

25. [25]
    The consideration for the transfer was stated to be “the balance owed by the mortgagors to [NAB] on the date of completion” (cl 2).
26. [26]
    The parties agreed that if any of the Mortgagors tendered any payment to NAB under or relating to the Mortgage after the first respondent had paid the consideration for the transfer, NAB would not accept that payment but redirect it to the first respondent (cl 5).
27. [27]
    NAB also agreed that if the first respondent requested that it provide evidence as to the existence or amount of the debt secured by the Mortgage (among other things), it would arrange to supply “such oral or written evidence as may be required for the enforcement of the mortgagees [sic] rights under the mortgage …” (cl 6).

Did payment of the purchase price under the Deed discharge the NAB debt?

28. [28]
    The applicant’s first argument as to why the Mortgage does not secure any debt is that upon completion of the assignment of the Mortgage, including the first respondent paying $120,267.00 to NAB pursuant to the Deed, no further amount was owing to NAB.
29. [29]
    The effect of this first argument is as follows: (i) the Mortgage secured all monies which the mortgagors owed to NAB; (ii) at the date the Mortgage was transferred to the first respondent the amount owed to NAB was $120,267; (iii) when the first respondent paid that amount to NAB under cl 2 of the Deed as “the balance owed by the mortgagors to the Bank on the date of completion”, no further amount remained owing to NAB; (iv) as a consequence, from the time that it was transferred to the first respondent, the Mortgage had ceased to secure any debt.
30. [30]
    I do not accept this first argument.  It seeks to treat the payment made by the first respondent pursuant to cl 2 of the Deed as a payment made to discharge the NAB debt owed by the mortgagors.  Although the parties to the Deed agreed that the consideration payable under cl 2 would be the amount of the NAB debt owed by the mortgagors, that does not mean the payment had the legal effect contended for by the applicant.  The text of cll 1 and 2 of the Deed makes it plain that the parties did not objectively intend for the consideration to be paid by the first respondent, or received by NAB, in discharge of the NAB debt.  The transaction effected by cl 1 of the Deed was, on the plain meaning of the words used, the purchase by the first respondent of rights held by NAB.  The money paid by the first respondent under cl 2 of the Deed was the consideration it paid to purchase those rights.  That payment did not reduce the amount of the NAB debt.

Did the Deed assign the benefit of the overdraft facility to the first respondent?

31. [31]
    The applicant’s second argument as to why the Mortgage does not secure any debt is that the overdraft facility, which gave rise to the NAB debt, was not assigned to the first respondent.
32. [32]
    The effect of the applicant’s second argument is that no assignment of the debt payable to the NAB under the overdraft facility was effected by either:

    1. the registration of the transfer of the Mortgage; or
    2. the Deed.
33. [33]
    There is no dispute between the parties as to the first of these propositions.  It was authoritatively settled by the High Court in Queensland Premier Mines Pty Ltd v French^[1] that s 62 of the Land Title Act 1994 (Qld) does not operate to assign the right to recover moneys owed under a loan agreement that is separate from but secured by a mortgage.  The respondents do not submit to the contrary.  They do not rely upon that statutory provision as a source of the assignment to the first respondent of the right to recover the NAB debt.
34. [34]
    It is the dispute over the second proposition identified in [32] that is critical to the determination of this aspect of the application.
35. [35]
    Before turning to consider that question, it is useful to set out the nature of the dispute in Queensland Premier Mines and the reasoning of both the High Court and the Victorian Court of Appeal in that case.  That reasoning, although not binding in terms of the issue to be determined on the present application, nevertheless assists in the process of construing the Deed.

Queensland Premier Mines

36. [36]
    The case concerned two loans, advanced under separate loan agreements, each secured by mortgages.  Under the first loan, the lender advanced $410,000 to Queensland Premier Mines Pty Ltd (QPM) and Mr and Mrs Beckinsale as joint debtors.  Under the second loan agreement, the lender advanced $560,000 to QPM as sole debtor.  The purpose of the loans was to enable QPM to acquire and develop land into a shopping centre.  QPM executed two “all monies” mortgages, over different parcels of land forming part of the development site, which secured the respective liabilities of the debtors under each of the loan agreements.  Those mortgages were duly registered.  The Beckinsales were not a party to the mortgages.
37. [37]
    The mortgages each contained a covenant by QPM, as mortgagor, to “pay each amount included in the Secured Moneys to the Mortgagee … on the date fixed for payment of that amount under any Facility Agreement” and charged the land with repayment of those sums.  The “Mortgagee” was defined as the original lender, its successors and assigns; “Secured Moneys” as all moneys owing or which will become payable on any account; and “Facility Agreement” to include the provision of finance on any agreement pursuant to which moneys are lent by the mortgagee to the mortgagor.
38. [38]
    The other party to the litigation, Mr French, was not the original lender or mortgagee.  He took an assignment of the loans, and the mortgages securing them, from the original lender. 
39. [39]
    No moneys were repaid by QPM and the Beckinsales.  Mr French wrote to Mr Beckinsale concerning his proposal to sell the land the subject of the mortgages.  At that time, the outstanding principal and interest due under the loan agreements were in the order of $4 million.  Following some further correspondence, Mr French accepted Mr Beckinsale’s offer, on behalf of Marminta Pty Ltd (Marminta), to pay $950,000 to “buy back” the mortgages.
40. [40]
    A dispute arose between Marminta and Mr French before their agreement for the sale and purchase of the mortgages had completed.  QPM agreed to sell the development site, including the land the subject of the mortgages, for $2.44 million.  Marminta brought an action in this Court for specific performance of its agreement with Mr French.  Mr French brought a proceeding in the Supreme Court of Victoria seeking to recover amounts due under the loan agreements.
41. [41]
    Marminta failed at first instance in its claim for specific performance but succeeded on appeal.  Pursuant to the order for specific performance made on appeal, a transfer of the mortgages by Mr French to Marminta and a release of those mortgages by Marminta were registered. The development site was then transferred to the purchaser from QPM. 
42. [42]
    There was no written assignment of Mr French’s rights under the loan agreements to Marminta.  In the proceedings in this Court, Marminta initially claimed that such an assignment formed part of the agreement for the sale of the mortgages but was found to have abandoned that contention at trial.  After the order for specific performance had been perfected and settlement of the agreement for the sale and purchase of the mortgages had occurred, Marminta applied to the Queensland Court of Appeal to vary its orders to include the words “and the debts secured thereby” as part of the subject of the agreement to be specifically performed.  That application was refused.^[2]
43. [43]
    In those circumstances, Mr French’s claim for payment of amounts due under the loan agreements turned on the proper construction of s 62 of the Land Title Act, that being the only basis upon which QPM and the Beckinsales argued that registration of the transfer of the mortgages from Mr French to Marminta vested the right to recover the debts due under the loan agreements in Marminta such that it became, and Mr French ceased to be, the creditor of QPM and the Beckinsales in respect of any sums due and owing under the loan agreements.  It is this reliance on s 62 of the Land Title Act which distinguishes the present application from the issue determined in Queensland Premier Mines.
44. [44]
    Mr French failed at first instance but succeeded before the Victorian Court of Appeal^[3] and the High Court.  The leading judgment in the Victorian Court of Appeal was delivered by Maxwell P.  His Honour commenced his reasoning by recognising that a mortgage transaction has two aspects: the contractual (the covenant to pay) and the proprietary (the mortgage or charge).  The mortgage security and the personal obligation to repay the debt are conceptually, and contractually, independent of each other, even where they are contained in the same instrument.^[4]  On the facts of that case, there were two separate and distinct covenants to repay: the first, contained in the loan agreements, was a free-standing covenant enforceable in accordance with its terms; the second, contained in the mortgages, was a further promise by QPM as mortgagor to pay in accordance with the terms of the loan agreements.^[5]  On that basis, the mortgages were the source of the liability created by the mortgage covenant, but not the source of the liability created by the covenant to repay contained in the loan agreements.^[6]
45. [45]
    Maxwell P held that, by reason of the construction given to s 62, the registration of the transfer of the mortgages from Mr French to Marminta had the effect of vesting in Marminta the rights which Mr French had under the covenant to pay contained in the mortgages, but left unaffected Mr French’s rights under the covenant to repay contained in the loan agreements.  Relevantly, for the purposes of the present application, his Honour stated that he saw no contractual or other obstacle to Mr French enforcing the loan agreements against the debtors in accordance with their terms.^[7]  His Honour rejected an argument, advanced on behalf of the respondent debtors, that it was impossible to separate the loan agreements from the mortgages That argument was based on the decision of the High Court in Hutchens v Deauville Investments Pty Ltd,^[8] a case in which Mr Hutchens had guaranteed the debts of a company and given a mortgage to secure his liability as guarantor.  There was an assignment by the lender of the principal debt and Mr Hutchens’ guarantee and mortgage to another company, Helvetic.  Helvetic, in turn, assigned Mr Hutchens’ mortgage to Deauville Investments.  There was no express transfer of the principal debt or Mr Hutchens’ guarantee (which the mortgage secured) but the High Court assumed, without deciding, that the benefit of the guarantee had also been transferred.^[9]  In that context, the High Court addressed the proposition that the benefit of Mr Hutchens’ guarantee and mortgage to have passed to Deauville Investments and the principal debt to have remained with Helvetic, as follows:^[10]

“… it would seem to be simply impossible, as a matter of basic principle, to assign the benefit of a guarantee or the security for it (as distinct from the property secured) while retaining the benefit of the guaranteed debt and thereby to convert the one debt owing by both principal debtor and guarantor to the one creditor into two debts, one owing by the principal debtor to the creditor and the other owing by the guarantor to the assignee.”

46. [46]
    In Maxwell P’s view, there was no analogy between Hutchens and the claim by Mr French where there was no separation of a surety’s liability from the liability of the principal debtor.  Relevantly, his Honour stated that the separation of the mortgage and the debt, which occurred when the mortgages were transferred by Mr French to Marminta, did not have the effect of converting one debt into two.  There was only one debt, that which was owing under the loan agreements.  Although, by the covenant to pay in the mortgages, QPM made a separate promise (as mortgagor) to pay to the mortgagee the amounts payable (by the debtors, including itself) under the loan agreements, no amount was payable by QPM (as mortgagor) to Marminta (as mortgagee by transfer) pursuant to that covenant.  The covenant to pay under the mortgages was an obligation to pay amounts included in the “Secured Moneys”.  Those were amounts owed to “the Mortgagee” pursuant to any Facility Agreement.  Upon the transfer of the mortgages, and Marminta becoming “the Mortgagee” the covenant to repay in the mortgages had no application.  Absent an assignment of the benefit of the loan agreements to Marminta, there were no moneys payable to “the Mortgagee” pursuant to any Facility Agreement and, consequently, there were no “Secured Monets” to which QPM’s obligation under the covenant to pay under the mortgages could attach.  On that basis, the covenant to repay under the mortgages – although valid and enforceable by Marminta against QPM – was empty.  The position might, however, have been different if the agreement been Mr French and Marminta for the transfer of the mortgages also provided for the transfer to Marminta of the benefit of the loan agreements.^[11]
47. [47]
    Callaway and Redlich JJA agreed with Maxwell P that Mr French remained entitled, after the transfer of the mortgages, to recover the debt owing under the loan agreements. 
48. [48]
    Callaway JA considered that the debt arose from the loan agreement and the advance made thereunder, describing the covenant to pay in the mortgages as “purely collateral”.^[12]  His Honour observed that when a mortgage is transferred, it will very often be the case that the debt is transferred too, but that is the consequence of the agreement, express or implied, between the parties; not the operation of s 62 of the Land Title Act.  The transfer of the mortgages to Marminta was said to have a useful commercial purpose, in that the transfer effectively disencumbered the development site.^[13]
49. [49]
    Redlich JA concluded that the covenant to pay in the mortgages was a covenant to comply with the obligation under the loan agreements and did not confer a direct right of action.  On that basis, the mortgages did not create a personal liability in QPM as mortgagor for the mortgage debt.^[14]
50. [50]
    The High Court dismissed the appeal by QPM and the Beckinsales from the decision of the Victorian Court of Appeal.  The leading judgment was given by Kiefel J (as her Honour then was).  Although her Honour’s reasons focussed on the question of the construction s 62 of the Land Title Act, they summarised the reasoning of Maxwell P without calling that reasoning into question.^[15]  Kiefel J also endorsed the observations by Callaway JA referred to at [48] above.^[16]  In separate concurring reasons, Kirby J also adopted Callaway JA’s identification of the commercial purpose of transferring the mortgages without assigning the benefit of the loan agreements.^[17]

The proper construction of the Deed

51. [51]
    As the respondents submit, the right to payment conferred by the mortgagors’ covenant to repay in cl 1 of the Mortgage was a right which NAB held as mortgagee.  Consequently, that right was the subject of the agreement set out in cl 1 of the Deed.  Upon completion of the assignment and transfer of the Mortgage, the rights which NAB previously held under cl 1 of the Mortgage vested in the first respondent.  That is not sufficient, however, to conclude that the Mortgage continued to secure the NAB debt after the assignment and transfer of the Mortgage.
52. [52]
    Following the assignment and transfer of the Mortgage, the mortgagors are obliged under cl 1 to repay to the first respondent “all moneys which are now or may from time to time hereafter be owing or remain unpaid to the Bank” (emphasis added).  When NAB was the mortgagee, this clause applied to moneys payable by the mortgagors as borrowers under the overdraft facility.  Following the assignment and transfer of the Mortgage, the term “Bank” in cl 1 is to be read as a reference to the first respondent as NAB’s transferee (cl 30). 
53. [53]
    The difficulty this creates for the first respondent is the same as that which confronted QPM and the Beckinsales in Queensland Premier Mines.  The covenant to repay in cl 1 of the Mortgage was an additional promise by the mortgagors to repay the amount owing under the overdraft facility, but it did not create a free-standing obligation to repay that amount to the first respondent unless the benefit of the overdraft facility (i.e. the debt owed under the terms of the overdraft facility) was also assigned to it.  Put another way, unless the debt owed under the overdraft facility was assigned to the first respondent, along with the rights of the mortgagee under the Mortgage, there would be nothing owed to the first respondent and, consequently, no moneys owing or remaining unpaid to “the Bank” for the purposes of cl 1 of the Mortgage.
54. [54]
    The question then is whether, on its proper construction, the effect of the Deed was to assign to the first respondent the debt which the original co-owners of the Land owed to NAB under the overdraft facility, as well as NAB’s rights under the Mortgage. 
55. [55]
    The principles which govern the process of construing a commercial contract are clear.  An objective approach is required to determine the rights and liabilities of a party to such a contract, by reference to its text, context and purpose.  The meaning to be given to the terms of the contract is determined by reference to what a reasonable business person would have understood those terms to mean.^[18]
56. [56]
    Clause 1 of the Deed does not refer to NAB’s rights against the original co-owners of the Land as borrowers under the overdraft facility.  It refers only to NAB’s rights as mortgagee under the Mortgage.  If that clause is construed literally as the applicant contends, NAB would have remained entitled to repayment of the debt owed by the co-owners under the overdraft facility, notwithstanding the assignment and transfer of the Mortgage (albeit the debt would no longer have been secured by the Mortgage).  Having regard to the context of the Deed and the purpose of the transaction the parties sought to effect by it, I do not consider that to be the correct construction of cl 1 of the Deed.  In my view, a reasonable business person would have understood that, by cl 1 of the Deed, the first respondent agreed to purchase and NAB agreed to transfer, not only its rights as mortgagee under the Mortgage, but also the underlying debt owed by the original co-owners under the overdraft facility which was secured by the Mortgage.
57. [57]
    The circumstances preceding the entry into the Deed, set out in [10]-[12] above, were matters known to both NAB and the first respondent.  A reasonable business person with knowledge of those matters would have understood the reference to the mortgagors’ default in the recitals to the Deed to mean the default in paying the debt which the co-owners owed to NAB under the overdraft facility.  The evident purpose of the transaction was for Ms Cohen, Ms Herron and Ms Watson, the three co-owners who had paid their proportionate share of the NAB debt, to avoid NAB exercising its power of sale by purchasing, through the first respondent, NAB’s interest in the Mortgage.  However, I cannot see any useful commercial purpose which would be served by separating the Mortgage from the underlying NAB debt which it secured.  I do not accept the applicant’s submission that the ability of the first respondent to release the Mortgage so that Ms Cohen, Ms Herron and Ms Watson could pursue a sale of the Land would warrant separating the Mortgage from the underlying NAB debt.  Nor do I accept that the objective purpose of the parties to the Deed should be ascertained on the basis that any remedies that those co-owners of the Land, or the first respondent, might have had against Mr Cameron lay by way of contribution.  A right to contribution would only exist if the first respondent discharged the debt owed by the co-owners, including Mr Cameron.  I have already found at [30] that the consideration paid under the Deed did not discharge the debt which the co-owners owed to NAB.
58. [58]
    The adoption in cl 2 of the Deed of the outstanding balance owed under the overdraft facility as the price of the transfer of NAB’s rights is consistent with the first respondent seeking to avoid NAB exercising its power of sale.  By paying a price under the Deed that was equal to the outstanding debt to NAB, the first respondent removed the need for NAB to sell the Land to recover the debt.  However, it would not be commercially sensible to conclude that, despite having received payment of a price for its rights against the mortgagors equal to the outstanding debt, NAB nevertheless retained its rights to recover that debt under the overdraft facility which would be the effect of separating the Mortgage from the NAB debt as the applicant proposes.  Considered objectively, the reason for linking the consideration payable under the Deed to the outstanding amount of the debt owed under the overdraft facility is that this consideration was paid for a transfer of both the outstanding debt and the rights of the mortgagee under the Mortgage which secured that debt.
59. [59]
    This conclusion is reinforced by the terms of cl 5 which prevented NAB from accepting any payment made under or relating to the Mortgage after it had been paid the consideration under the Deed.  The debt owed under the overdraft facility was secured by the Mortgage, such that the tendering of payment of that debt would relate to the Mortgage for the purposes of cl 5 and NAB would be required to redirect that payment to the first respondent.  That obligation to redirect payments of the debt owed under the overdraft facility can only be understood as an objective indication that the parties to the Deed intended that NAB would transfer the underlying debt secured by the Mortgage as well as the rights of NAB to enforce repayment of that debt under the terms of the Mortgage.
60. [60]
    To similar effect, NAB’s obligation under cl 6 of the Deed to provide evidence of the amount of the debt secured by the Mortgage is consistent with the parties’ intention that NAB would transfer its right to recover that underlying debt.
61. [61]
    On the construction which I have adopted, cl 1 of the Deed assigned the debt which the original co-owners owed under the overdraft facility to the first respondent, together with NAB’s rights as mortgagee under the Mortgage.
62. [62]
    The applicant raises several matters in support of her submission that the Deed should be construed as an assignment only of NAB’s rights under the Mortgage.
63. [63]
    First, the applicant submits that the language used in cl 1 of the Deed (“all of the Banks [sic] interest, rights and previleges [sic] as Mortgagee under that mortgage”) does no more than reflect the effect of s 62 of the Land Title Act.  That is, the decision of the parties to the Deed to use similar language in cl 1 to that which is used in s 62 means that the Deed should be construed consistently with the effect of s 62.   I do not accept that submission.  As the respondents point out, the task of construing cl 1 of Deed in the present case and the task which the Victorian Court of Appeal and the High Court undertook in construing s 62 in Queensland Premier Mines are different.  It cannot be assumed from the words used in cl 1 that the parties to the Deed intended that the operation of that clause would reflect the operation of s 62.  That is particularly the case in circumstances where the parties executed the Deed several years before the decisions of the Victorian Court of Appeal and the High Court in Queensland Premier Mines were delivered.  On that basis, the observation by Kirby J in Queensland Premier Mines^[19] that conveyancers, once instructed on what s 62 requires, will provide expressly for the transfer of rights and obligations under a separate loan agreement (where that is the parties’ intended result) does not assist in the construction of the Deed in the present case.
64. [64]
    Secondly, the applicant refers to the unsuccessful attempt which Marminta made in the Court of Appeal to vary its orders for specific performance to include a reference to the underlying debts (see [42] above).  She submits that, because the construction the respondents seek to place on the Deed in the present case would have the same effect as Marminta sought to achieve by its proposed variation, the refusal by the Court of Appeal to allow that variation tells against the respondent’s construction of the Deed.  I disagree.  The Court of Appeal’s refusal to allow the variation sought by Marminta was based upon the way in which Marminta conducted its case and the very late stage at which the application to vary the orders was made.^[20]  Neither of those considerations exist in the present case.  In my view, the outcome of Marminta’s application to vary the orders for specific performance has no bearing on the construction of the Deed in the present case.
65. [65]
    Thirdly, the applicant relies upon Mr Cameron’s evidence^[21] that there was no agreement between the then co-owners of the Land and the first respondent regarding a transfer of the debt owed under the overdraft facility.  Although that evidence can be accepted, it does not assist the applicant.  On the respondents’ argument, the assignment by the Deed of the debt owed under the overdraft facility was effective, at least in equity, to transfer the right to recover that debt to the first respondent.  An equitable assignment of a debt is effective as between assignor (here, NAB) and assignee (here, the first respondent) without notice to the debtor (here, the original co-owners of the Land).^[22]  It was not necessary for the first respondent to reach any agreement with the then co-owners of the Land regarding a transfer of the NAB debt in order for the equitable assignment of that debt to be effective. 
66. [66]
    Fourthly, the applicant refers to the fact that the current co-owners of the Land were not parties to the overdraft facility or the Deed, such that there is no identity between the mortgagors under the Mortgage and the debtors under the overdraft facility.  In my view, that has no bearing upon the proper construction of the Deed.  The Deed is to be construed having regard to the circumstances which existed at the time it was executed.  At that time, the original co-owners of the Land were both the borrowers under the overdraft facility and the mortgagors under the Mortgage.  Consequently, there was a complete identity between the persons who owed the debt and the persons who were the subject of the security for that debt.  In those circumstances, the obligations which the original co-owners of the Land owed to NAB, as borrowers under the overdraft facility and as mortgagors under the Mortgage, were transferred to the first respondent.  From that time, the first respondent had a right to recover the debt owed under the facility agreement and to enforce that right under the terms of the Mortgage.  The current co-owners of the Land took their interest subject to the rights of the first respondent under the Mortgage.
67. [67]
    Finally, the applicant relies on the fact that, where the terms of the overdraft facility are not before the Court, there is no evidence as to what NAB might have been required to do to effectively assign its rights as creditor under that facility.  Mr Cameron deposes that, despite a thorough search, he has been unable to locate a copy of the terms of the overdraft facility.^[23]  The difficulty with this submission is that the applicant bears the onus of proof on the present application.  If she wished to advance an argument that, notwithstanding the construction of the Deed which I have adopted, the assignment of the debt owed under the facility agreement was ineffective because NAB did not comply with requirements contained in the terms of the overdraft facility, then it was for her to tender evidence of the relevant terms.  A suggestion that the overdraft facility might have contained requirements which NAB was required to comply with in order to assign its rights as creditor, and that NAB might not have complied with such requirements, is entirely speculative.  It does not alter my conclusion that the Deed operated to assign the debt owed under the overdraft facility to the first respondent.

The Mortgage continued to secure the obligation to repay the NAB debt

68. [68]
    What follows from the construction of the Deed set out above is that, following the assignment of the Mortgage (along with the debt owed to NAB under the overdraft facility) from NAB to the first respondent, the Mortgage continued to secure the mortgagors’ obligation to repay the NAB debt.  Once the transfer of the Mortgage to the first respondent was registered, the first respondent was entitled to recover the NAB debt pursuant to the terms of the Mortgage.^[24]
69. [69]
    The position remained the same after Mr Cameron’s interest in the Land was transferred to the applicant pursuant to the orders made in the Family Court.  When the transfer of Mr Cameron’s interest in the Land to the applicant was registered, that interest vested in the applicant subject to the interest created upon the earlier registration of the transfer of the Mortgage to the first respondent.^[25]  The applicant’s evidence^[26] that she was unaware that the Land was encumbered with the Mortgage at the time when the transfer of Mr Cameron’s interest to her was registered does not alter that outcome.  Further, upon registration of the transfer of Mr Cameron’s interest in the Land to the applicant, she became liable to comply with the terms of the Mortgage.^[27]  The Land remained charged with the first respondent’s right to recover the NAB debt under the terms of the Mortgage.
70. [70]
    In these circumstances, the application for a declaration that the Mortgage does not secure any debt must be dismissed.^[28]

Is a claim for payment of monies owed under the Mortgage statute-barred?

71. [71]
    The applicant submits, and it can be accepted for the purposes of determining this application, that any right to payment of the NAB debt under the terms of the Mortgage was a right to be paid on demand.  An action to recover a debt that is repayable on demand accrues from the date of the advance.^[29]  On that basis, the action to recover the NAB debt under the terms of the Mortgage accrued to the first respondent no later than 26 May 1999. 
72. [72]
    An action to recover the NAB debt under the terms of the Mortgage would be subject to a limitation period of 12 years.  The relevant limitation period is set out in either s 13 or s 26(1) of the Limitation of Actions Act 1974 (Qld).  Section 13 applies to an action to recover land.  Section 26(1) applies to an action to recover a principal sum secured by a mortgage.  That 12 year limitation period expired on 26 May 2011.
73. [73]
    The applicant relies on the expiry of the limitation period in two ways.  First, she submits that, upon the expiry of the limitation period referred to in s 13, s 24(1) of the Limitations of Actions Act operated to extinguish the first respondent’s title to the Land.  Secondly, she seeks a declaration that any claim by the first respondent for payment of monies owing under the Mortgage is statute-barred.

Extinguishment of title upon expiry of the limitation period

74. [74]
    Section 24 provides that (subject to certain provisions which are not said to apply in the present case) where the period of limitation within which a person may bring an action to recover land has expired the title of that person to the land shall be extinguished. 
75. [75]
    I do not accept the applicant’s submissions concerning extinguishment of the first respondent’s title under the Mortgage.  The question whether s 24 operates automatically at the end of the 12 year limitation period to extinguish a mortgagee’s title regardless of whether the mortgagor pleads that limitation period by way of defence was considered in Price v Spoor.^[30]  Kiefel CJ and Edelman J,^[31] as well as Steward J,^[32] concluded that s 24 did not operate in that way.  Instead, s 24 only operates once the limitation defence has been successfully pleaded.  It is at that point that s 13 operates to bar the remedy of recovery of the land and s 24 operates to extinguish the title of the person seeking recovery of the land.
76. [76]
    When regard is had to that construction of s 24 of the Limitations of Actions Act, the present circumstances do not provide any basis to conclude that the first respondent’s title as mortgagee has been extinguished.  The first respondent has not brought an action to recover the Land and there has been no plea of the limitation defence in s 13 by the applicant.  Consequently, on the facts as they presently stand, s 24 has not been engaged.

Declaratory relief in respect of the expiry of the limitation period

77. [77]
    It remains to consider the application for a declaration that a claim by the first respondent for payment of monies owed under the Mortgage would be statute-barred.^[33]
78. [78]
    The action to recover the NAB debt under the Mortgage first arose by no later than 26 May 1999.  Nevertheless, the first respondent submits that the applicant acknowledged the liability of the mortgagors to pay the NAB debt after the 12 year limitation period had expired and, consequently, by operation of ss 35(1) and (3) and s 36 of the Limitations of Actions Act, the claim to recover the NAB debt under the terms of the Mortgage accrued afresh upon that acknowledgement.
79. [79]
    Section 35 provides:

“35 Fresh accrual of action on acknowledgment or part payment

1.  Where there has accrued a right of action (including a foreclosure action) to recover land or a right of a mortgagee of personal property to bring a foreclosure action in respect of the property, and—

1.  the person in possession of the land or personal property acknowledges the title of the person to whom the right of action has accrued; or

2.  in the case of a foreclosure or other action by a mortgagee—the person in possession referred to in paragraph (a) or the person liable for the mortgage debt makes any payment in respect thereof, whether of principal or interest;

the right shall be deemed to have accrued on and not before the date of the acknowledgment or payment.

…

3.  Where a right of action has accrued to recover a debt or other liquidated pecuniary claim, … and the person liable or accountable therefor acknowledges the claim or makes a payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgment or the last payment.”

80. [80]
    Section 36 provides

“36 Formal provisions as to acknowledgment and part payment

1.  Every acknowledgment referred to in section 35 shall be in writing and signed by the person making the acknowledgment.

2.  Any acknowledgment or payment may be made by the agent of the person by whom it is required to be made under section 35 and shall be made to the person or to an agent of the person whose title or claim is being acknowledged or, as the case may be, in respect of whose claim the payment is being made.”

81. [81]
    The operation of ss 35(3) and 36, read together, was recently described in Manicaros v Commercial Images (Aust) Pty Ltd (in liq):^[34]

“… First, a right of action to recover the debt must have accrued.  Secondly, the person liable for the debt must acknowledge the claim.  Thirdly, the acknowledgment must be in writing and signed by the person making the acknowledgment.  Fourthly, an acknowledgment may be made by the agent of the person liable for the debt.  Fifthly, the acknowledgment must be made to the person or an agent of the person whose claim is being acknowledged.  Sixthly, if an acknowledgment satisfies the prescribed conditions, the right of action to recover the debt is deemed to have accrued on (and not before) the date of the acknowledgment.”

82. [82]
    Save for the description of the right of action which must have accrued, there is no reason to think that s 35(1) and 36, read together, operate any differently.
83. [83]
    The term “acknowledgement” is not defined in the Limitations of Actions Act.  In Manicaros,^[35] it was explained as follows:

“… an acknowledgment of a debt, for the purposes of s 35(3) and s 36 …, involves an admission of the debt which on a fair appraisal is clear or distinct, having regard to the whole of the relevant text and the relevant surrounding circumstances.”

84. [84]
    Furthermore, the question whether a document or documents constitute an acknowledgement is a question of construction, and the decided cases are of little value as precedents.^[36]
85. [85]
    As to a cause of action which has accrued under the terms of a mortgage, in General Credits Ltd v Wenham^[37] Meagher JA cited with approval the principle that:

“… to acknowledge the existence of a mortgage must amount to an acknowledgement of those rights which are necessarily inherent in all mortgages.”

86. [86]
    The first respondent relies on two forms of written acknowledgement:

    1. emails sent by the applicant’s solicitor between 15 June 2020 and 25 September 2020 to Ms Cohen (as director and shareholder of the first respondent) and to the first respondent’s solicitor seeking information on the outstanding debt owed under the Mortgage;
    2. a Deed entered into between the applicant, Noosa North Shore Investments Pty Ltd, Ian Cameron and William Cameron which was exhibited to the affidavit of Mr Cameron filed by the applicant in this proceeding on 2 February 2024 (Cameron Deed).^[38]
87. [87]
    As to the email correspondence:

    1. on 15 June 2020, the applicant’s solicitor sent an email to Ms Cohen which:
       3. (i)
          noted the existence of the Mortgage (and attached a copy);
       3. (ii)
          stated that the applicant would like the Land to be sold; and
       3. (iii)
          asked that Ms Cohen (as a director and shareholder of the first respondent) advise as to the first respondent’s requirements in relation to any sale of the Land;
    2. on 14 July 2020, the applicant’s solicitor responded to an email from the first respondent’s solicitor (advising that the first respondent would require the debt secured by the Mortgage to be paid in full before it would release the Mortgage) by stating that he looked forward to receiving “relevant details with respect to the [Mortgage]”;
    3. on 20 August 2020, the applicant’s solicitor sent an email to the first respondent’s solicitor requesting “a precise calculation of the outstanding debt, with respect to the [Mortgage]”, together with relevant information and documentation;
    4. on 25 September 2020, the applicant’s solicitor sent an email to the first respondent’s solicitor stating that he would be pleased to receive “confirmation of exactly what it is that is currently owing on the [Mortgage]” because the applicant was “wanting to know exactly the amount owing”.
88. [88]
    I am satisfied that, on a fair appraisal of the emails sent by the applicant’s solicitor (as her agent) in the context of the surrounding circumstances (particularly the indication that the applicant would like the Land sold), the applicant’s solicitor acknowledged the existence of the Mortgage.  By that acknowledgement, the applicant’s solicitor also acknowledged the first respondent’s right to recover monies duly payable under cl 1 of the Mortgage as a requirement for the discharge of the Mortgage upon any sale of the Land.  The acknowledgement was in writing, signed by the applicant’s agent (the person making the acknowledgement) and was made to either Ms Cohen or the first respondent’s solicitor (both being agents of the first respondent).
89. [89]
    As to the Cameron Deed, the applicant signed that document on 23 June 2023.  The definitions of “Mortgage” and “Mortgagee” in cl 1.1 of the Cameron Deed make it clear that it was the Mortgage held by the first respondent which was the subject of the recitals and cl 4 set out below.
90. [90]
    The recitals to the Cameron Deed provided as follows:

“BACKGROUND

1. A
   [The applicant] owns the Land.

2. B
   The mortgage is registered over the Land.

3. C
   [The applicant] has agreed to sell 50% of her interest in the Land to [Noosa North Shore Investments Pty Ltd] and to transfer 50% of her interest in the Land to [Ian Cameron] on the terms of this Deed to be held by them as tenants in common.

4. D
   [Noosa North Shore Investments Pty Ltd] and [William Cameron] will be responsible for negotiating a release of the Mortgage and for paying all money due and owing to the Mortgagee in order to secure that release. …”

91. [91]
    The operative part of the Cameron Deed also provided that Noosa North Shore Investments Pty Ltd and William Cameron would:

    1. pay the Mortgagee whatever was outstanding in order to secure a release of the Mortgage: cl 4(a); and
    2. use their best endeavours to secure a release of the Mortgage prior to the date of settlement of the proposed sale to Noosa North Shore Investments Pty Ltd: cl 4(b).
92. [92]
    The applicant executed the Cameron Deed in circumstances where she must have been aware of the terms of the Mortgage.  In addition to the express references to the Mortgage in the Cameron Deed, this is to be inferred from the fact that, on 15 June 2020, the applicant’s solicitor sent an email to Ms Cohen attaching the Mortgage (see [87](a) above). 
93. [93]
    On that basis, I am satisfied that the terms of the Cameron Deed extracted above amounted to an acknowledgement of the existence of the Mortgage and, consequently, an acknowledgement of the first respondent’s right to recover monies duly payable under cl 1 of the Mortgage.  The acknowledgement was in writing and signed by the applicant.  I am further satisfied that, by filing the affidavit of Mr Cameron which exhibited the Cameron Deed and serving that affidavit on the first respondent as a party to the present proceeding, the acknowledgments were made to the first respondent.  It does not matter that the applicant might not have intended to communicate those acknowledgements to the first respondent, so long as the document which contains the acknowledgements is actually delivered to the first respondent.^[39]
94. [94]
    The conclusions I have reached in [88] and [93] above mean that I am satisfied that the applicant acknowledged the first respondent’s title as mortgagee, with the result that a right of action to recover the Land accrued to the first respondent in 2020 or 2024 pursuant to s 35(1) of the Limitation of Action Act. 
95. [95]
    That is of little relevance on the present application, however, because the relief sought by the applicant is for a declaration that a “claim … for payment” of any monies owing under the Mortgage is statute-barred.  This raises consideration of s 35(3) of the Limitation of Action Act and, specifically, the requirement that the debtor acknowledge the first respondent’s claim to recover the debt. 
96. [96]
    Despite acknowledging both the existence of the Mortgage and the first respondent’s right to recover monies duly payable under cl 1 of the Mortgage, neither the email correspondence from the applicant’s solicitor nor the Cameron Deed expressly accepts a liability to repay the NAB debt in a particular sum.  That may not be fatal to the first respondent’s argument that the applicant acknowledged its claim to recover the NAB debt.  Such acknowledgement need not specify the amount of the debt precisely, provided that the amount is ascertainable from extrinsic evidence.^[40]
97. [97]
    The question whether the amount of the NAB debt is ascertainable from extrinsic evidence was not litigated by the parties on the present application.  That became clear from the outset of the hearing when the applicant objected to evidence given by Mr Malouf (one of the second respondents) concerning the calculation of interest on the NAB debt.  The objection raised was one of relevance, in circumstances where the first respondent had not sought any relief by reference to the mortgagors being liable to pay the NAB debt in a particular sum.  The respondents agreed that there was no issue between the parties on the present application as to the precise amount of the NAB debt.^[41]
98. [98]
    In those circumstances, I am unable to form a concluded view as to whether the applicant’s acknowledgments referred to in [88] and [93] above amount to an acknowledgement of the first respondent’s claim to recover the NAB debt.  Consequently, I am unable to reach a concluded view as to whether s 35(3) of the Limitation of Actions Act operates to preclude a finding that a claim by the first respondent for monies owing under the Mortgage is statute-barred.
99. [99]
    It would only be possible to form a concluded view on those related issues if, consistently with the orthodox approach to the application of limitation defences,^[42] the applicant pleads a limitation defence to a claim by the first respondent for payment of the NAB debt (in a specified sum) and the first respondent, in turn, pleads the operation of s 35(3) of the Limitation of Action Act.  In the present circumstances I am not prepared, as a matter of discretion, to make the declaration which the applicant seeks on the present application.

Should the first respondent be ordered to release the Mortgage

100. [100]
     The applicant seeks an order that the first respondent take all steps reasonably necessary to lodge for registration an instrument releasing the Mortgage pursuant to s 81 of the Land Title Act.^[43]
101. [101]
     That relief would only be appropriate if I had concluded that the Mortgage does not secure any debt or that a claim by the first respondent for payment of monies owing under the Mortgage is statute-barred.  As I have not reached either of those conclusions, I am not satisfied that the applicant has established a basis for making an order requiring that the first respondent lodge an instrument releasing the Mortgage.

Conclusion

102. [102]
     For the reasons given above, the amended originating application will be dismissed.
103. [103]
     Both parties submitted that there was no reason why costs should not follow the event.  I agree that it is appropriate in the circumstances for costs to follow the event.  I will order that the applicant pay the respondents’ costs of and incidental to the amended originating application filed by leave on 26 April 2024 to be assessed on the standard basis if not agreed.