Kyabram Property Investments v Murray [2005] NSWSC 1202

In this case two lenders sought rectification of mortgages claiming particular titles had been left off by mistake. The borrower had defaulted on the loan and the lenders were mortgagees in possession.

The property that was made up of 24 separate lots, 21 of which were Torrens Title land and 3 were Old System land. When the borrower went to a bank seeking a loan, her solicitors sent documents of title for all 24 lots to the bank at her request. When the prepared its mortgages they only referred to the Torrens Title properties although some of the documentation they had both sent and received referred to the bore water licence, which was tied to an Old System block and “730 hectares” which was the size of the Torrens Title and Old System land combined.

The borrower unsuccessfully argued that there was not an ‘operative mistake justifying rectification’ with the court holding that:

In my opinion this is a clear case in which a mistake has been made in expressing a common intention of contracting parties as to the terms of their agreement.

Accordingly the court ordered rectification of the mortgages to include the Old System land.

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