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Week 10: Mortgages, Pt A - Coggle Diagram
Week 10: Mortgages, Pt A
Back ground
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Today under Torrens the Mortgagor retains legal title, the mortgagee has a registerable security over the land
There are also restrictions upon the Mortgagee's right to take the property in the event of default by the Mortgagor
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Mortgagee - Lender, has security over the land which can be registered on title
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Equitable mortgage - Situation in QLD - Torrens
- Unlike many other States there is virtually no general law land left in QLD
- So it is Torrens title which matters
- However equitable mortgages are still recognised under Torrens in QLD
- From 1/10/19 s 76 of LTA was repealed. This had the effect on equitable mortgages by deposit of title deed.
- S 215 LTA - C/T cease as legal instruments from 1/10/19
- See ss 214 - 217 LTA
Equitable mortgages
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However, in situations where parties have entered into a loan agreement to create a mortgage, and that was never registered, equity can still recognise.
There must have been a memorandum in writing, evidencing the agreement and the money must have been advanced to the borrower.
If there is no written memorandum, then oral and acts of performance will suffice, and the money must be advanced to borrower.
- Acts of performance governed by principles in Walsh v Lonsdale (1882) 21 Ch 9
- These principles apply in other areas too, such as leases
Deposit of title deeds with the M'gee was/is sufficient act of part performance. This is providing other factors are present too that would imply the parties have entered into a mortgage
- Theodore v Mistford Pty Ltd (2005) 221 CLR 612
However, from 1/10/19 title deeds are abolished and therefore this category of interest can no longer be created.
Pre-existing equitable mortgages of this nature will still be upheld however they are vulnerable to defeat to registered interests which are contrary to the security
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Or a caveat, but caveats can lapse