The lender was accused of selling the property at undervalue.
The judge noted that a mortgagee has a duty to act in good faith and also a statutory duty to take reasonable care to ensure property is sold at market value.
The land was put to auction and sold and the marketing campaign was not criticised. The court found no evidence that the property was sold below market value or that the bank failed to take reasonable steps to ensure the properties were sold at market value or breached its duty of good faith.
The judge observed:
“In the ordinary course, the sale price achieved on the open market is market value. The price paid by the prudent purchaser will be the price negotiated by voluntary bargaining between the vendor and purchaser, both willing to trade, but neither so anxious that either will overlook any ordinary business consideration. Alternatively, it will be the price paid at auction by a prudent purchaser.”
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