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Week 10 Mortgages - Coggle Diagram

- - - - S 83 PLA Powers incident to estate or interest of mortgagee
      - S 84 PLA Regulation of exercise of power of sale
      - S 77
    - - The three basic prerequisites for the exercise of the power of sale by a registered mortgagee are:
        
        1 Default in the payment of principal or interest under the loan contract by the mortgagor;
        
        2 Notice served by the mortgagee upon the mortgagor setting out the nature of the default and the amount needed to be paid to remedy the default; and
        
        3 Default by the mortgagor continuing for a period of 30 days following the service of the notice.
    - - See Websdale v s & JD Investments Pty Ltd (1991) 24 NSWLR 573
    - - ANZ banking Group Ltd v Bangadilly Pastoral Co Pty Ltd (1978) 139 CLR 195 and Benzlaw & Associates Pty Ltd v Medi-Aid Centre Foundation Ltd [2007] QSC 233
    - - Does the equitable duty amount to a negligence test? See the discussion on the state of the law in this area
        
        Cuckmere Brick Co Ltd v Mutual Finance Co Ltd [1971] Ch 949
        
        Upton v Tasmanian Perpetual Trustees Ltd [2007] FCAFC 57
    - - Westpac Banking Corporation Ltd v Kingsland (1991) 26 NSWLR 700
    - - See S 85(1), (1A) PLA
        
        In Queensland the PLA applies to impose upon the mortgagee the obligation to take reasonable care to ensure that the property is sold at market value.
    - - See S 99 PLA
    - - See S 87 PLA
      - See Forsyth v Blundell (1973) 129 CLR 477
      - See also Tendiris Pty Ltd v Ogle [2004] QSC 355
        
        applying s 87 PLA.
      - The appropriate remedy will be dependent upon the circumstances of the dispute arising between the mortgagor and the mortgagee regarding the power of sale.
        
        If the sale is not prevented by court order, the mortgagor will be left to seek an action for damages.
      - Application of proceeds of sale
        
        See s 88 PLA
      - Application by mortgagor for injective relief of restraint exercise of power of sale
      - Exceptions to the requirement of payment into court
  - - - However, in reality today this is rarely the course adopted by a mortgagee, where the mortgagor is in default. It is more practical and appropriate for the mortgagee to exercise their statutory power of sale under the LTA.
      - See s 78(2) PLA
    - - Most M’gors do not want this they want satisfaction of the debt.
        
        Can only be done by court order slow process.
- - - - Where the formality requirements have not been complied with it may still be possible to validate the mortgage within the equitable jurisdiction. An equitable mortgage may arise in a number of different circumstances.
        
        Equitable Mortgages
        
        Under Torrens a legal mortgage must be registered on title
        
        What about situations where parties entered into a loan agreement to create a mortgage but it was never registered?
        
        There must be a memorandum in writing evidencing the agreement and the money must have been advanced to the borrower – equity will then recognise it
        
        If no writing can be oral and acts of part performance will suffice. Again, money must be advanced to borrower.
        
        Deposit of the title deeds with the M’gee was/is sufficient acts of part performance. This is providing other factors are present too to imply that 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
  - - - 1 A formally executed mortgage conferring a security over equitable title.
      - 2 A formal mortgage over legal title which has not been properly executed.
      - 3 A specifically enforceable agreement to grant a mortgage.
  - - - M’gor retains legal title in fee simple subject to the mortgage
    - - ‘…covenants which are effectively part of the estate or interest in the land or are “intimately connected with” the interest attracts the quality of indefeasibility.’
        Mercantile Credits v Shell Ltd (1976) 136 CLR 326 HCA
        
        Although this is a leasing case it applies to mortgages
    - - This was put in place to stop careless m'gee making a claim
  - - - s 82 PLA note the abrogation of tacking under this section
    - - Tacking and priorities between Torrens system mortgages under the LTA
        
        See Mercantile Credits Ltd v ANZ Banking Group Ltd (1988) 48 SASR 407
        
        S 178 LTA regarding priority between registered dealings in accordance with date of registration.
        
        Ss 82, 84(3) PLA in relation to tacking on advances.
- - - - Sun North Investments Pty Ltd (as Trustee of the Sun Development Trust) v Dale [2014] 1 Qd R 369 a Queensland case discussing Westfield
      - Westfield Holding Ltd v Australian Capital Television Pty Ltd (1992) 32 NSWLR 194
    - - PT Thiess Contractors Indonesia v PT Arutmin Indonesia [2015] QSC 123 at [151]-[157]
  - - - The debtor/borrower is a natural person (no companies);
      - Credit for domestic /residential property;
      - Charge for the credit (interest rate); and
      - Credit provider provides the credit in the course of their usual business as a provider of credit
        
        S 5 National Credit Code
  - - - Must be out of all proportion
      - Must be oppressive
        
        PT Theiss Contractors Indonesia v PT Arutmin Indonesia [2015] QSC 123
      - Contract and equity have long recognised that certain clauses that are considered penalties will not be enforceable.
    - - No restrictions subject to mortgage document
      - Even if in breach of mortgage and do not get consent from M’gee the transaction may still be valid.
        
        Nia v Phoung (1993) 6 PBR 13141
      - In Qld s PLA 80(4) allows M’gor to enter into a second m’ge without consent of first M’gee
      - If National Credit Code applies need consent of M’gee which will not unreasonably be withheld, s 51