Ostabridge v Adelaide Brighton [2007] NSWCA 59

This case concerned a power of sale under an mortgage. The mortgage was unregistered when contracts were exchanged but registered prior to purchaser attempting to settle. Hodgson JA had this to say:

Counsel provided a reference to Midland Montagu Australia Limited v. Cuthbertson (1989) 17 NSWLR 309, which decided that, where a mortgage relies on the statutory powers under s.58 after registration of a Real Property Act mortgage, it does not matter that the notice of default was given before registration. This case followed a similar decision of the Full Court of the Supreme Court of Victoria in Mathieson v. Mercantile Finance & Agency Co. Limited (1891) 17 VLR 271. It appears that in both of these cases, the mortgage was already registered when the contract of sale was entered into; but I note that in Cox v. Esanda Finance [2000] NSWSC 502, Hunter J at [201] said that registration of the mortgage before execution of the transfer of the mortgaged property was sufficient.

The lender/vendors (who were trying to escape the contract) argued that the purchasers in asking for a copy of the s57(2)(b) notice were repudiating the contract because s58 of the RPA protected them.

The court did not agree and stated that the request for a copy of the notice did not amount to repudiation of the contract as it was suffixed with the reasonable postscript “We are happy to consider your views on this issue”.  Thus the appellant lender/vendor lost and the trial judge order of specific performance was affirmed.

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