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Mortgages - Coggle Diagram

- - - - s 128-142
      - s 128
        
        a Mortgage is registrable
      - s 132
        
        nature of a mortgage
      - s 133
        
        power of sale
      - s 134
        
        Protection of a purchaser when buying a property pursuant to the exercise of the power of sale
  - - - Stantley v Wilde
    - - Unregistered mortgage
  - - - Every mortgage under the RPA will have effect as a security but will not operate as a transfer of the land thereby charged
        
        s 132
    - - s67,128,132 RPA
    - - s132 RPA
    - - Barry v Heider
    - - mortgage agreement in registrable form
      - a buyer interested in the land
        
        doesnt want it encumbered by the mortgage
        
        wants it off the CT when he becomes the RP otherwise he takes the property with the mortgage
        
        Conveyancing practice
        
        STEP 1: contract for sale of land between vendor and buyer
        
        STEP 2: Appointment at LTO with conveyancers acting for vendor, vendor’s bank, the buyer and the buyer’s bank
        
        STEP 3: Buyer gives $ to vendor
        
        STEP 4: Vendor gives enough $ to mortgagee to pay out the mortgage
        
        STEP 5: Mortgagee removes mortgage from CT
        
        STEP 6: CT transferred to vendor free of the mortgage
        
        STEP 7: another mortgage?
  - - - general law
        
        it was the right of the mortgagor to get back the property(equity of redemption)
      - Torrens system
        
        the mortgagor has a statutory right to discharge the mortgage upon payment of the debt and under the contractual obligation of both parties
    - - general law
        
        entitled the mortgagee to take the land without the right of redemption by the mortgagor
      - Torrens system
        
        retained as a remdy
        
        Procedural requirements in s 140-142 RPA
        
        including an application to the registrar general
        
        s 142
        
        every order for foreclosure shall have the effect of vesting in the mortgagee all the estate and interest of the mortgagor in the land free from all right and equity of redemption on part of the mortgagor
        
        Campbell v Holyland
        
        can a mortgager be allowed to redeem after an order of foreclosure
        
        Although foreclosure of the land by the mortgagee would enable him/her to hold the property free from the equitable right of redemption the foreclosure may be reopened under limited conditions (such as in the case of fraud or where rights of a third party are involved)
        
        Perry v Rolfe
        
        nature of mortgage under torrens system
        
        there can be no such thing as a true redemption suit in the case of mortgage under torrens system
  - - - national consumer protection Act
    - - s 45B(1)
  - - - a liability to repay moneys under the mortgage fall due in the event of breach of covenant or condition that provision shall be inoperative
        
        s 55A(2)
        
        restrictions
        
        no clogs on the equity of redemption
        
        restraint of trade
        
        Penalty
        
        Unconscionability
        
        The lending of money, on mortgage or otherwise, was looked on with suspicion, and the court was on the alert to discover want of conscience in the terms imposed by lenders
        
        Kreglinger v New Patagonia Meat and Cold Storage
        
        ridgewater v Leahy (1998)
        
        Garcia v National Australian Bank (1998)
        
        Commercial Bank of Australia v Amadio (1983) 151 CLR 447
        
        Relief will be given when advantage is taken on an innocent party
  - - - • Real Property Act 1886 (SA)
        
        ◦ Sections 132 – 136
      - • Law of Property Act 1936 (SA)
        
        ◦ Sections 47 (1)(a),
        
        ◦ Section 48 and
        
        ◦ Section 55A
      - Notice
        
        Under Torrens system notice by the mortgagee to the mortgagor prior to the exercise of the power of sale is necessary
        
        Section 132
        
        provides that the default needs to have been continued for one month before the mortgagee can issue a notice to the mortgagor to rectify the breach
        
        Section 133
        
        provides that if the breach remains unrectified for a further month then the power of sale can be exercised.
        
        • Websdale v Said JD Investments Pty Ltd (1991) 24 NSWLR 573
        
        ◦ The notice must identify that it is given according to the provisions of the Act
        
        ◦ It must require the payment of the principal and/or interest with respect to the defaulted payment
        
        ◦ An incorrect assertion of non-payment of principal and a correct assertion of payment of interest is invalid
        
        ◦ The notice shall say that the property will be sold if the default is continued (Cth Development Bank of Australia Ltd v Cormack (1983) )
        
        Guidelines
        
        • Must be in writing (s. 132)
        
        • Shall ask the mortgagor to correct the default
        
        • Stating the amount inaccurately (in calculation) does not invalidate the notice on that ground alone (Websdale)
        
        • The provisions are interpreted strictly by courts (particularly in SA) - and see: Cth Development Bank of Australia Ltd v Cormack (1983) 108 LSJS 38
        
        • Notice and Facebook?
        
        • MKM Capital Pty Ltd v Corbo & Poyser (unreported, ACT Supreme Court, Master Harper, 12 December 2008):
        
        • Citigroup Pty Ltd v Weerakoon [2008] QDC 174: email to a facebook account is not a notice
      - considerations/obligations
        
        • Motives of mortgagor are irrelevant in legitimacy of the sale: Belton v Bass, Ratcliffe v Gretton Ltd [1922] 2 Ch 449.
        
        • However, the mortgagee has a duty not to sacrifice the interest of the mortgagor
        
        Pendlebury v Colonial Mutual Life Assurance Society Ltd (1912) 13 CLR 676
        
        • The mortgagee cannot sell the property, which is subject to the default mortgage to himself or herself
        
        ANZ Banking Group Ltd v Bangadilly Pastral Co (1978)
        
        • Two tests:
        
        ◦ Reasonable care test
        
        • Duty of Mortgagee (Reasonable Care Test) - Obtaining the best possible price
        
        ◦ Cuckmere Brick Co. Ltd v Mutual Finance Ltd [1971] 1 Ch 949
        
        ◦ Westpac Banking Co ltd v Kingsland [1991] 26 NSWLR 700
        
        ◦ Acting in good faith
        
        • Duty of Mortgagee (Acting in good Faith)
        
        ◦ Kennedy v De Trafford [1897] AC 180
        
        ◦ Pendlebury v Colonial Mutual Life Assurance Society Ltd (1912) 13 CLR 676
        
        a mortgagee selling under circumstances which show a reckless disregard of the interests of the mortgagor is responsible to the same extent and on the same principles as an accounting party who is liable for willful default.
        
        I think, therefore, that the defendants are liable to account to the plaintiff for the amount which would have been realized on a sale of the property conducted without willful default, which I hold to have been established in the sense in which it is used in judgments directing such an account
        
        What is the appropriate test?
        
        • Australian cases have preferred equitable good faith obligations as the basic principle of the mortgagee’s responsibility when exercising the power of sale
        
        Ultimate Property Group Pty Ltd v Lord (2004) 60 NSWLR 646
        
        Upton v Tasmanian Perpetual Trustees [2007] 158 FCR 118
  - - - ◦ Recall Rice v Rice and Heid v Reliance
      - Terranova v Secure Funding Pty Ltd [2014] WASC 208
    - - ◦ Verification of identity
- - - - General law system or unregistered torrens system
        
        s 34(1) LPA
        
        my take right of land or benefit of any covenant although not named as a party
        
        the benefit may pass but not burden
        
        Annexation(to land)
        
        Benefit v Burden
        
        chain of indemnity(contractual agreement)
        
        taking benefit with burden
        
        annexation by rentcharge
        
        Blacks v rix; Burke v Yurilla
        
        Assignment (to person and their successor in title)
        
        Austerberry v Corporation
        
        covenant that imposes a burden does not run with the land in such a way as to bind those who may acquire it
        
        attempts to modify
        
        HAlsal v Brizell
        
        1 more item...
        
        covenants in equity
        
        2 more items...
        
        Legal requirements to pass benefit
        
        must touch and concern the land
        
        Roger v Hosegood
        
        Must affect the land as regards mode of occupation or it must be per se and not merely from collateral circumstances
        
        affects value of the land
        
        benefit runs with the land of covenantee while burden does not run with the land of covenantor
        
        the covenantee benefits from the covenant only if they have the legal estate
        
        a beneficiary under a trust is excluded as well as other equitable interests holders
        
        Webb v Russell
        
        An assignee and the covenantee must have the same legal estate
        
        Westhoughton UDC vWigan Coal and Iron Co Ltd
        
        holder of a title cannot pass a covenant to a holder of a lease
        
        Only vaild in sa
        
        the benefit of the covenant must be intended to run
        
        Federated Homes ltd v Mill Lodge Properties
        
        only valid in sa
        
        Smith and snipes Hall Farm ltd v River Douglas Catchment Board
        
        discusses all factors in one case
    - - Rigid and unfair
      - significant practical difficulties
        
        particularly for public authorities (local councils)
    - - by agreement
      - By Unity of ownership
        
        Texaco Antilles Ltd v Kernochan
      - By loches or Acquisence
      - by state legislation
  - - - Beswick v Beswick
    - - Tulk v Moxhay
  - - - there is nothing in the RPA which renders the covenant unenforceable against the P
  - - - Deguisa v Lynn
      - but planning controls may provide certain remedies
        
        hutchens & Anor v City of Holdfast Bay and Anor
        
        planning, development and infrastructure Act
        
        no one has monopoly on views but that does not entitle the proponent of a new construct a building which will obstruct currently enjoyed views when it could be done and view remains
      - Victoria Park Racing and Recreation Grounds Co Ltd v Taylor