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Lecture

3. Mortgages

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Department
Law
Course
JSB171
Professor
All Professors
Semester
Spring

Description
Mortgages security interest that gives a creditor a right against property of a debtor to secure repayment of the debt oincludes a charge on a lot for securing money or moneys worth s4 LTAFormalitiesLegal mortgageoMortgage may be created by registering an instrument of mortgage s721 LTA oForm mtg must be executeddescribe lotdescribe debt or liabilitydescribe interest to be mortgaged s731 LTA right to have registered if executedlodged s183 LTAo takes effect as a charge over the land for the debt or liability secured s74 LTA cf old systemmortgageconveyanceo transfers the interest at law when registered s181 LTAo takes effect as a deed when registered s176 LTAo indefeasibilityregistered mortgagee takes interest subject to prior registered interests but free from all equitable interests s184 LTAEquitable mortgageocan be created by leaving the certificate of title with the mortgagee s751 LTAoany other mortgage agreement which has not been executedlodged must be in writing to be enforceable s59 PLA overcoming formalitiespart performanceequitable estoppelCovenantsNormal covenantsoCharging to repay amount within certain period on certain termsoAll accountsAll monies clause bringing other credit card debts etc against landoAcceleration clause mortgagor fails to pay oncemortgagee can call up all monies to allow exercise of right of sale otherwise mortgagee would have to sue individually for each instalmentStatutory relief available to avoid misuse s95 PLAImplied covenantsoTo repay money and interest s781a PLAoTo keep in repair and to allow mortgagee to enterinspect s781b PLAoCan be excluded by contract s783 PLAStandard terms s168 169 LTASpecial set of covenants s171 LTA2 Mortgages1Andrew TrotterLWB244 Property BMortgagesRights of MortgagorSUMMARYRight to RedeemRight of possessionRight to possess the title deed ndRight to 2 MortgageRight to deal with the landRight to have subsequent mortgage set aside Indefeasibility QRight to relief against the sale of the propertyRights against mortgagee for the sale of the property at undervalueRight to RedeemMortgagor has a right upon fulfilment of obligations to free the property of the charge Re ANZ Banking GroupoCf redemptionprocess by which money repaid and property freed of chargeOriginated in old systemcarried over to the Torrens system Re ANZ Banking Group Even if late up until acquiredsold by mortgageeEquity will allowopay interest on extra period any extra costs incurred He who seeks equity must do equityEquity will not allow a clog upon the mortgagors right to recover the land free of the chargeoOption to purchase in mortgagoroPostponing right to redeemoCollateral advantageOption to PurchaseMortgage cannot prevent the mortgagor from redeeming the property after the discharge of the obligations through option to purchase in favour of mortgagee Samuel v Jarrah Timber Option to purchase mortgaged stock granted to mortgageewithin 12 months at 40 valueno recourse provided for mortgagorprovision voidinconsistent with equitablecontractual right to redeemPerhaps no clog if option to purchase contained in a separateindependent document cf Samuel v Jarrah Timberoalthough the courts will look to substance not to form Samuel v Jarrah Timber Westfield Holdings v AC TV NSW salelease backnot a mortgageModern approachinvalidated only where mortgagee obtains an unfair collateral advantage and mortgagor is not free where needy borrower is not a free borrower Westfield Holdings v AC TV NSW not clear if this will be followed A owns landmortgages to W giving option to purchaseuses money to acquire TV stations situated on that landW exercises option to purchase leases back to Aoption to purchase is validno vulnerability or unfair advantagein substance more like a salelease back than a mortgageoaim of equity is to prevent unconscionable dealing by the mortgageeoLess likely to find an unfair advantage in transactions between commercial entities than private individualsconsideration of consumer protection Westfield Holdings v AC TV NSWPostponement2 Mortgages2Andrew TrotterLWB244 Property B
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