The bank enforced its mortgage against a company and the surplus proceeds were paid into court. The company then sought payment of the surplus out of court.
To establish pay out, three elements must be proved:
- the registered proprietor must be properly indentified;
- the claimant must have a proprietary interest in the fund;
- other potential claimants must have been notified of the claim and their claims withdrawn or settled.
The court held all three elements satisfied. The court noted that it is well established that surplus funds after a mortgagee sale are held on trust by the mortgagee for the registered proprietor. However the court stayed its orders for the payout pending notice to the ATO and to ASIC, the unsecured creditors of the company.