The plaintiff leased land from the Crown which was then transferred to the defendant and the Plaintiff took a mortgage back. The plaintiff served a s57(2)(b) notice to exercise its powers of sale prior to the mortgage being registered. It was held that it is not necessary for a mortgage to be registered at the time of service of a s57(2)(b) notice. However in order for powers under s58 (power of sale) to be exercised or (as in this case) declared as existing, the mortgage must be registered. Enforcement proceedings (as a registered mortgage under s60 of the RPA) could only take place after registration.
The next issue concerned the obligation of the Plaintiff under the Crown Lands Act to notify the minister of enforcement action and obtain consent of any subsequent transferee. The Court held that the purpose is to keep the minister informed and the failure of the lender did not allow the borrower to resist the lender exercising its rights under the mortgage. Therefore the plaintiff’s claim for possession and a right to exercise its power of sale powers was upheld.