Practice Areas

Bransgroves have led the field in acting for lenders on advances for over ten years. We can assist in the largest and most complex mortgage advances or with simple and straight forward advances. Our pricing is extremely competitive and our work careful and precise. Our specialisation in this work, and our automated document production, allow us to be lightning fast in our turn around for producing documents.

Our rigorous systems, procedures and checklists ensure top quality service. Our expertise in suing other solicitors who have negligently performed mortgage advances, serves to keep us constantly on our toes.

We accept instructions to act on complex and high-value (>$1 million) mortgage advances, loans involving multiple securities, in multiple states, with multiple guarantors, multiple borrowers, multiple trusts, with multiple beneficiaries, and multiple charges over encumbered companies are par for our course. We are particularly skilled in documenting construction loans. In fact, many of our clients are mortgage funds run by solicitors or ex-solicitors. Despite having the qualifications to act for themselves, they know that when a matter is complex, or high value, it is quicker and safer to use our services.

Matthew Bransgrove used his vast experience in mortgage law to write a chapter in his textbook on mortgage drafting. This involved reviewing the security documents of all the major lenders in Australia and considering the last 10 years of case law on questions involving mortgage drafting.

In 2001 Matthew drafted his first comprehensive mortgage memorandum. This document has been punctiliously revised over the subsequent years in light of experience and the case law. From time to time there are cases which significantly impact on the rights of lenders, the comprehensive mortgage memorandum drafted by Matthew incorporates these lessons into state of the art suite of security documents. We use these documents for mortgage advances carried out by this firm. We also license our security documents, at reasonably rates, to lenders to be used by other solicitors or in-house.

We will happily act as consultants in designing in-house procedures, including precedents and checklists for lenders who issue their own mortgage documents. We own and continually develop multiple suites of mortgage documentation, for which we sell perpetual licences and customise to suit our clients' needs. These documents are based on battle-hardened (court tested) deeds which have been developed and refined over many years.
 

Anyone can lend money out, but the test of diligence is in recovering it undiminished. Mortgage enforcement is one of the primary focuses of our practice, our daily exposure to the twists and turns of contested mortgages constantly hones our skills and provides us with a knowledge-base for advising clients on mortgage due diligence procedures.

Due diligence procedures are often dead letter, in case after case, lenders have been punished for not adhering to their own procedures. This is a shame because often those procedures set up unnecessary hurdles. Recent decisions under the Contracts Review Act and the National Credit Code cases have found that failure of a lender to adhere to its own procedures can result in the loan being found unjust. Moreover, recent valuation decisions have found that lenders will be punished severely in the calculation of contributory negligence if they breach their own procedures.

Bransgroves can help identify what procedures will genuinely assist in loss prevention while at the same time ensuring the lender is not set up to lose a challenge mounted under the Contracts Review Act, NCC or s137B Competition and Consumer Act 2010 or in proceedings against valuers.

Lenders using our services for the first time will find that no fact situation or legal dilemma gives us pause because we have seen it all before and are geared to act quickly and cost effectively. The sheer volume of mortgage enforcement work means that even our junior solicitors have more experience in this field than senior solicitors at other firms. The advantages of this specialisation are not limited to expertise. Typically, we have multiple matters in the possession list; this means that there are significant cost savings as attendance costs can be spread over multiple matters. Our clients also find that interlocutory applications, such as applications for summary judgment, are for the most part dealt with in-house, reducing the need to retain barristers. The familiarity our solicitors have with the quirks and peculiarities of the individual registrars and associate judges ensure that all the documents they require are available and, so, applications are not refused as often happens when advocates and members of the bench are unfamiliar with each others procedures, requirements, and temperament. 

The global credit collapse has revealed weaknesses in the underlying business model adopted in securitised lending. The separation of the ownership of the money from the underwriting decision, by several layers of intermediaries, has proven to be unwieldy. The result has been extensive losses with funders attempting to recover from originators and brokers.

Many origination deeds, entered into during the halcyon days of the credit boom, were poorly drafted and did not reflect the underlying commercial realities of the arrangement. Underwriting guidelines, and agreed procedures, were tacitly ignored by both funders and originators, creating an ambiguous legal situation not easily defined. Funders are now seeking to enforce the full severity of the origination agreement, including onerous indemnity clauses. However, fortunately originators and brokers are not defenceless. In addition to defences arising from estoppel (not allowing departures tacitly agreed by both sides to be denied by the funder) there is also the new proportionate liability regimes that increasingly come into play. Bransgroves Lawyers have also developed various defences based on contractual arguments derived from the wording of the deeds themselves, and departures from agreed procedures by the funders.

Our partners Kate Cooper and Georgia Fletcher have run several large cases for originators who have had their trailing commission seized by wholesale funders. Our extensive experience in the mortgage industry means that we are familiar with all the issues surrounding these claims. This includes the structure of the relationships between brokers, aggregators, lenders' mortgage insurers, originator-funders, and lenders. Our extensive experience suing valuers gives us unique insight into the potential proportionate liability of valuers, solicitors, brokers, and borrowers. Our far reaching understanding of Contracts Review Act defences gives us further unique insight into the mitigation steps taken by the funders.
 

Matthew Bransgrove and Kate Cooper are experts in the field of establishing and maintaining mortgage investment schemes. Our skills in drafting mortgage documentation dovetail with our skills in drafting constitutions, Product Disclosure Statements, Information Memorandums, lending manual, compliance plans and other mortgage scheme documents to ensure that your mortgage scheme is 100% legally effective and compliant.

Bransgroves acts for in excess of 20 AFS licences that operate contributory mortgage schemes providing a one stop shop for scheme licensing, establishment, compliance and mortgage documentation and enforcement.

Bransgroves are the Australian distributor of The Mortgage Office software which provides a turn-key solution for operating mortgages schemes and accounting to investors and borrowers alike.

Wholesale investors

If an AFS licensee has a wholesale licence only, it can only raise money from wholesale investors.  The main categories of wholesale investors are:

1. Those who invest $500,000 or more.
2. Those who control $10m of assets or more.
3. Those who can provide an accountant’s certificate stating that they meet one of the following:

• They have net assets of $2.5m or more, or 
• They have a gross income for the last 2 years of $250,000 or more.

Note – in certain circumstances entities controlled by a person that meets the asset or income test can be aggregated together.

Any investor that is not wholesale is retail.

Wholesale AFS licence benefits

As noted above, a holder of a wholesale AFS licence can only raise money from wholesale investors.  But the NTA requirements for the licence are low (a mere surplus of assets over liabilities only is required).  The only other real solvency test is that the licensee shows it has necessary cash flow to meet its business needs over the next 6 months at all times.

A wholesale licensee cannot issue a PDS or Prospectus.  It can only issue information memoranda.

A full retail AFS licence

A full retail licence is usually referred to as a ‘responsible entity’ licence.  It’s still a form of AFS licence.

This licence allows:

• The licensee to be the responsible entity (trustee) of a registered managed investment scheme.
• Raise unlimited $ amounts from both retail and wholesale investors via Product Disclosure Statements.

It carries with it onerous NTA requirements, which are the greater of:

• $150,000,
• 0.5% of the average value of scheme property of the registered schemes it operates (up to $5 million), and
• 10% of the average responsible entity revenue (as defined) (with no maximum).

Also, registered managed investment schemes are higher cost than unregistered ones – they need a compliance committee and a full annual audit and potentially a six month audit review.

Halfway between the two

There is an AFS licence for clients that is basically wholesale but with limited ability to raise money from retail investors.

Sections 708/1012E of the Corporations Act allow a licensee to raise up to $2m every 12 months from up to 20 retail investors by way of ‘personal offers’ to retail investors (the 20/12/$2m rule).  Unlimited personal offers can be made but only 20 acceptances every 12 months.

The benefit of such a licence is that it does not carry the NTA requirements of a responsible entity AFS licence.  The downside is that the licence does not permit PDS’s or Prospectuses to be issued, only information memoranda.

Consistent with our commitment to service the mortgage lending industry, Bransgroves Lawyers have invested substantial time and effort reviewing and understanding the legislation, regulations and ASIC Regulatory Guides, relating to the provision of credit subject to the National Consumer Credit Protection Act 2009.

Our solicitors have a commercial and practical understanding of the operational challenges facing lenders in an ever-changing regulatory environment. By combining our detailed knowledge of the regulatory environment with a strong understanding of your business our lawyers can help your business meet its regulatory and prudential challenges at minimum cost and with optimal commercial results. This allows us to reliably and efficiently advise our lender clients on avoiding coded loans and enforcing allegedly coded loans.
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We understand that construction disputes involve complex technical and factual issues, voluminous documents, and often many parties and a long project history. We understand that our clients cannot afford a legal free-for-all, with disastrous financial consequences for projects, firms and guarantors. To eliminate this we carefully balance theoretical legal rights with the realities of the situation and help our clients devise strategies to short-circuit potential disputes and bring about optimal settlements for our clients. Our construction documents recognised as the most flexible and meticulous in the industry are used by over 30 lenders for large and small construction loans. 

Mortgage priorities can be quite treacherous for subsequent and prior lenders. Bransgroves not only have the skills to protect lenders at the documentation stage but can also help structure workable arrangements in otherwise dubious circumstances. Our consultancy work can help lenders develop procedures to recognise priority traps and pitfalls. This extends not only to mortgage priorities but also to fixed and floating charges. Most priority disputes occur when lenders stumble blindly into a situation without recognising that there are priority implications. 

Matthew Bransgrove, is the co-author of the Essential Guide to Mortgage Law in NSW, and heads up our property litigation departments. His extensive experience in property litigation in NSW goes back 20 years. By virtue of our extensive involvement in mortgage enforcement over the last 10 years Bransgroves acted in many of the leading cases in relation to property law. All our partners contribute extensively to the academic literature on property law through our College of Law papers and our article in the Law Society Journal.

Whatever your property related dispute, Bransgroves will be able to recognize the crux of the dispute and dig up a strategy and legal precedent to suit your position. Our legal expertise enables us to achieve outcomes for our client, in most cases through the use of interlocutory applications that effectively dispose of the dispute, avoiding the need for a full-blown trial.

1. Caveats
2. Compensation from the Torrens Assurance Fund
3. Constructions loans
4. Contracts for the Sale of Land
5. Correction of the register
6. Crown leases
7. Easements
8. Equitable mortgages
9. Farm Debts Mediation Act
10. Indefeasibility
11. Injunctions to restrain sale
12. Insolvent registered proprietors
13. Joint tenancies
14. Joint ventures
15. Judicial sale
16. Leases
17. Life estates
18. Marshalling
19. Mortgages
20. Negligent conveyances
21. Negligent valuation
22. Notices to Complete
23. Purchaser's lien
24. Rescission of contracts for sale
25. Registration
26. Restrictive covenants
27. Right to possession
28. s66(G) applications
29. Stamp duty
30. Strata title
31. Sub-division
32. Tenancies in common
33. Transfers
34. Vendor finance
35. Writ of possession

Matthew Bransgrove is an expert on the External Dispute Resolution regime which applies to Australian lenders. He was commissioned by lenders with combined loan books of $5.3 billion, to draft a petition addressed to the Parliamentary Joint Committee on Corporations and Financial Services and the Senate Economics Legislation Committee entitled “Why the External Dispute Resolution regime is hurting capital availability in Australia”.

Every bank and every lender involved in consumer lending must hold an AFSL. Every holder of an AFSL must be a member of an External Dispute Resolution Scheme (“EDR”). There are two External Dispute Resolution schemes: the Financial Ombudsman Scheme (“FOS”) and the Credit Ombudsman Service Limited (“COSL”).

In April 2011 ASIC brought out Regulatory Guide 139, entitled Approval and oversight of external dispute resolution schemes. In this document ASIC set out certain mandatory requirements for inclusion in the terms of reference of all EDR schemes. RG 139 introduces a revolutionary principle which amounts to a de facto mortgage moratorium. Paragraph 72 states:

The Terms of Reference of an EDR scheme must require that legal proceedings by scheme members should not be commenced where a complaint or dispute has been lodged with the scheme.

Paragraph 77 goes on to state:

Where legal proceedings that relate to debt recovery proceedings have already commenced and a complainant or disputant takes their complaint or dispute to an EDR scheme, the Terms of Reference must require the member not to pursue the legal proceedings beyond the minimum necessary to preserve its legal rights.

Bransgroves Lawyers can assist in resolving these complaints quickly and efficiently utilising our in-depth knowledge of EDR Terms of Reference and jurisdictional issues.

Bransgroves Lawyers have been suing valuers for 10 years. During that time we have developed unrivalled expertise in analysing valuations and correctly assessing the prospects and quantum of success. Matthew Bransgrove and Kate Cooper have presented several papers on valuer liability for the NSW College of Law.

Since the GFC we have acted on over 20 valuer negligence matters and none have gone to trial–all have settled favourably for the lender. This is testament to our thorough and skilled case preparation. As a rule, valuer’s insurers will never settle unless they are convinced that they will lose if the matter goes to trial and that the lender is determined and ready to go to trial. Thus everything depends on putting together a credible case and proceeding towards trial with the intention of litigating.

Our initial approach is to assist you in quantifying your damages and assessing the strength of your case. This initially involves examining the legal issues and if they are in order, commissioning an expert retrospective valuation. Once we are convinced you are going to win and the damages recoverable are worthwhile, we file proceedings. Typically we file in the Federal Court and typically we have settled the matter within 6 months of filing.