Pursuant to a settlement agreement reached with borrowers following a farm debts mediation, a course was agreed to sell the farms to repay the debt. The lender entered into contracts to sell the farms as mortgagee and the borrowers lodged caveats to prevent the settlements occurring and the lender sought their removal. The borrowers argued that the bank contracted to sell the farms without taking care to obtain the proper price and there was no default for the purposes of the bank’s notice of exercise of its power of sale.
The court rejected these arguments on the basis that no valuation evidence had been obtained by the borrowers to support their complaint of a sale at undervalue and both the borrowers’ default and a course to be followed to sell the farms had been agreed in the settlement agreement. The court noted that the debt substantially exceeded the sale price of the farms and if their sale was impeded, the gap would only increase and would also expose the lenders to a claim by the purchasers of the farms. The court found that the borrowers had no serious case to be tried relevant to their caveats and ordered their removal and also prevented further caveats being lodged without leave of the court.