Olde v Metro Surf Australia [2012] NSWSC 618

The receiver brought possession proceedings against an occupier.

The occupier argued that as the receivers were agents of the mortgagor then whatever rights the occupier had with the mortgagor bound the receivers. The judge agreed that that position was correct and cited Magar v Arab Bank Australia Limited [2010] NSWSC 553.

However, the difference between the facts of Magar and this case was that in that case there was a tenant pursuant to an unregistered lease which was granted after the mortgage had been granted. The Court found that as between mortgagor landlord and the tenant the lease was binding, although it was not binding as between mortgagee and tenant. Thus, if receivers appointed as agents for the landlord/mortgagor took proceedings to obtain possession from the tenant, those proceedings would fail as the mortgagor was bound as between it and the tenant to recognise the lease. However if the mortgagee took proceedings it would succeed. Click here to read our case note on Magar.

As in this case there was no lease, only a licence, the question was whether or not the receiver (standing in the shoes of the mortgagor) had given reasonable notice of the termination of the contractual licence. The judge addressed this as follows:

The receiver argues that four weeks is reasonable. The occupier says three months.

The difficulties for the occupier are to find some site to which the material can be moved, to hire the necessary lifting equipment and trucks to get the equipment off the site and, presumably, to have money to do so but no evidence of financial difficulty has been given.

While it may seem to be just taking a middle course, it seems to me that a period of six weeks will be sufficient for the defendant and in some ways is quite generous to it as it has taken no action up to the present time, to make arrangements to move.

Click here to read the full judgment

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