FTFS Holdings v Business Acquisitions Australia [2006] NSWSC 846

In this case a broker’s mandate (commission agreement) contained a charging clause purporting to charge the land for payment of the unpaid brokerage. The broker lodged a caveat and the borrower attempted to remove the caveat. The caveat did not specify the amount that was owing under the charge however Palmer J held:

It seems to me, therefore, that a failure to state the amount secured by the charge is, of its nature, curable by RPA s.74L: … The terms of the Mandate Agreement were unquestionably made known to the Plaintiff; the debate is whether the Plaintiff ever accepted those terms. The terms show the manner in which the Defendant’s fee is calculated. If the Plaintiff is ultimately found to have agreed to the terms of the Mandate Agreement, then the means of calculating the Defendant’s fee will have been known to the Plaintiff for some time. For those reasons, I do not think that the caveat should be held incurably bad because of the omission from the caveat form of the amount claimed to be secured by the charge.

The borrower also argued that because the mandate agreement was only ever orally accepted it could not create an interest in land. However the court noted that the doctrine of part performance could and did cure this defect.

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