Mortgage Drafting

Conridge v Schaapveld [2015] NSWSC 663

There were two neighbours who were good friends. One would often borrow money from the other for business purposes. The loans were never documented. On this occasion, the borrower requested $500K to start a frozen custard franchising business. It was done on a hand shake between the borrower and his son and the lender. 10 …

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Titles Strata Management v Nirta [2015] VSC 187

A husband and wife mortgaged their pizza shop (registered) and home (unregistered) to secure a short term loan with interest at 8% per month (96% per annum) which they defaulted on. The lender obtained judgment against the husband but the wife claimed that her signature was forged. The court believed the wife that her signatures …

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Kupang Resources v International Litigation Partners [2015] WASCA 89

The tax office was owed tax by the lender and sent the borrower a section 260-5 notice requiring the borrower to pay the instalments owing to the lender to the ATO instead. A 260-5 notice is essentially a garnishee notices. They are served on parties who owe a taxpayer money or will owe it in …

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KBL Mining v Kidman Resources [2015] NSWSC 515

An entity that owned a mine obtained funding through notes issued by it and gave security over its mine. The lender assigned its rights to the mine’s competitor and the new lender alleged default. This was challenged by the borrower along with its liability to pay interest. The borrower argued that the redemption of its …

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Sydney Markets Credit Services v Taylor (No. 2) [2015] NSWSC 499

Two brothers executed a business guarantee which contained the following charging clause: The Guarantors each hereby charges their respective interests in any land now or hereafter held by them for all monies guaranteed pursuant to this Deed. Some years later they purchased a property in their own name as trustees of their superannuation fund. Some …

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Meldov v Bank of Queensland [2015] NSWSC 378

The Bank of Queensland advanced $760k more than it intended to advance to the borrower by mistake. Within 2 months the borrower drew down on the additional money. Later the bank exercised power of sale and applied the proceeds to the amounts owing to the bank (including the mistaken advance). The second mortgagee sued the …

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NAB v Voukidis [2015] NSWSC 185

The bank sought possession. The wife initially sought to argue unjustness under the Contracts Review Act and unconscionability. These claims were abandoned and the bank was granted possession. The bank then sought monetary judgement so it could pursue the borrowers for any shortfall. In response, the wife then sought to reinstate her previous defences and …

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Brice v Chambers [2014] QCA 310

In this case, there was a dispute about whether a loan agreement provided for simple interest or compound interest. The court held that because there was no reference to rests or capitalisation, and because there was a default rate, simple interest must have been intended. Click here to read full judgment.

Salta Constructions v St George Bank [2014] VSCA 289

We previously reported on the trial at first instance. This note is about the appeal. St George (as first ranking mortgagee) sold the property for $20 million and retained all the money against a debt it claimed was $54 million.  Salta Constructions (as second ranking mortgagee) argued that the bulk of the money claimed by St …

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In the matter of Matlic Pty Ltd (in liq) [2014] NSWSC 1342

The borrower was formed as a trustee of a trust for two couples to make investments. One of the couples was aware of a development in Tumut which was offering a third of the profit for its investors. The trust therefore borrowed to invest in the third party development. Following extensive delays in obtaining consent …

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