Meares Nominees v Permanent Custodians [2009] NSWCA 235

In this matter the borrowers mortgaged a large farming property in the southern part of New South Wales. The property had been in the family for three generation. After negation pursuant ot the Farm Debt Mediation Act a deed was entered into whereby the lender would provide a release of the mortgage if a compromise amount was paid by a certain date. The money was not paid by the date but the borrowers sought to enforce the deed anyway.

The borrower argued that the court, exercising its equitable jurisdiction, could wave the due date and effectively give the borrower an extension. This was rejected by the court. The court noted that such indulgences could only have been afforded if the lender had gained something from the promise to pay the money. In effect the deed was a one-way street. It was the lender being extremely generous but not actually getting anything in return over and above what it already had under the mortgage. As such the court had not power to order specific performance of the deed once the time limit had expired.

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