Cases - Security Interests

Question 1

Italia Holdings

Answer 1

Underlying credit contracts
- Not oppressive term as borrower was a sophisticted commercial party

Question 2

Greenbank v Haas

Answer 2

Underlying credit contracts
- Key question is contravention of reasonable standards of business practice

Question 3

Raptorial Holdings

Answer 3

Underlying credit contracts
- Holistic inquiry

Question 4

Taylor v Westpac

Answer 4

Underlying credit contracts
- Need more than unfairness

Question 5

GE Custodian

Answer 5

Underlying credit contracts
- Oppressiveness is an objective test

Question 6

ANZ Banking Group v Gibson

Answer 6

Mortgages
- 2 hours is enough to expect repayment for an on-demand loan

Question 7

Duncan v Macdonald

Answer 7

Indefeasibility
- Borrows not personally liable as fraudster signed the loan

Question 8

Westpac v Clarke

Answer 8

Indefeasibility
- Unable to claim against true RO as was fraud and not registered

Question 9

Peace v Morris

Answer 9

Indefeasibility
- Future purchaser could buy the mortgage
- Deducted from settlement price

Question 10

Tart v Tarn

Answer 10

Indefeasibility
- Fixed term tenant can buy mortgage

Question 11

Coltart v Lepionka

Answer 11

Indefeasibility
- Holder of right to purchase could buy mortgage

Remedies for mortgagee
- Good faith duty when seeking remedies

Question 12

Kreglinger v New Patagonia Meat

Answer 12

Clogs test:
1. Clause is unconscionable or oppressive
2. Clause is penal
3. Clause is repugnant and prevents rights to redeem!

Question 13

Noakes v Rice

Answer 13

Clogs
Facts:
- Tenant signed clause to not sell any other liquor for term of lease
Held:
- This was a clog and only lasted term of the mortgage

Question 14

Bradley v Carrit

Answer 14

Clogs
- Mortgage on condition to use voting power for shareholders benefit
Held:
- This was a clog and only lasted until mortgage repaid

Question 15

Reeve v Lisle

Answer 15

Clogs
Facts:
- Mortgage
- 2 years later, Option agreement referring to Mortgage
Held:
- Not a clog, security was secondary to the agreement

Question 16

Lewis v Frank Love

Answer 16

Clogs
Even when there are formally multiple transactions, they can be viewed as one

Question 17

Lockwood buildings

Answer 17

Remedies for mortgagee
When MOR does not want to sue in trespass, the MEE may do this provided they have possession before suing

Question 18

JS Brooksbank & Co v EXFTX

Answer 18

PPSA
- Mistaken delivery of wool
- Must look at the transaction in substance

Question 19

King Robb Sleepyhead Manufacturing v Dunphy and Shepard

Answer 19

PPSA Attachment
- D&S were not third parties so could have SI enforced against them

Question 20

New Zealand Bloodstock v Walker and Agnew

Answer 20

PPSA Attachment
- Perfected SI takes priority

Question 21

Graham and Gibson v Portacom

Answer 21

PPSA Attachment
- Lease for more than a year create sufficient rights for SI to attach

Question 22

Partners Finance and Lease v Richmond

Answer 22

PPSA Enforcing
- Bulldozer was classified as other not serial number good/motor vehicle = seriously misleading

Question 23

Grey v Royal Bank of Canada

Answer 23

PPSA Enforcing
- Mere possession is enough for rights in
- SI could not be enforced against true owner but only third parties

Question 24

Gibson v Stockco

Answer 24

PPSA
- Whether sale authorised by SP is a question of fact
- It is the ordinary course of business for that specific sellor that counts, not for the type of business generally

Question 25

Orix v Milne

Answer 25

PPSA
- Two step test:
1. What is ordinary course of business?
2. Is it within this ordinary course of business?

Question 26

Alberta Pacific Leasing v Petro

Answer 26

PPSA
- Even though highly irregular, was still within ordinary course of business

Question 27

Estevan credit union v Dyer

Answer 27

PPSA
- Outside normal course of business
- Sold half of the stock to a friend who knew about financial troubles

Question 28

Saskatchewan v Pettyjohn

Answer 28

PPSA
- Proceeds can go past overdrawn bank accounts if there is a close and substantial link between the old and new thing
- Canadian case