Southern Cross Constructions v Salfa [2009] NSWSC 634

In this case a builder, who was owed money under a construction contract, agreed to accept a mortgage as security for the debt. This was later challenged on the basis of s7D of the Home Building Act:

A contract does not give…a legal or equitable interest in any land, and a provision in a contract…is void to the extent that it purports to create such an agreement or interest.

Justice Hammerschlag rejected this argument as the mortgage was not a building contract, it was given after the debt arose, and so Act did not apply and the mortgage was valid.

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