security - 3+4 Flashcards
the amount secured can be
zero
- if lion fully repaid, the mtg can remain registered
- mee retains indefeasible title
- for ease when making new loans
equity of redemption
- ability to get land back free of all obligations only when
- debt exceed land vlaue
- land is sold to a bona fide purchaser
- cannot be on a term loan, borrower must wait until term expires
purchaser avenues to address the mtg
- purchasing the mtg form the mee
- equity of redemption - acquire the mtg eq of red, allowing them to redeem the mtg by paying the secured amount to mee b4 prop is sold
coltart facts
-lepionka purchase first mtg from pac, become #1 mee w rights over land
- mr coltart lodge caveat from option to purchase
coltart held
- confirms that if a purchaser can have an equitable interest to justify equity of redemption, so does mr coltart who has an option to purchase
coltart side note
even if what is held is true won’t be that beneficial to mr col as redeeming to mtg will remove the first mee but he will indebted to GLW and AFI will have the first mtg, contract will still be bound by this
forgery
under contract law, forged documents are void
- person being impersonated owes no debt as they didn’t sign so unenforceable
however in forgery
indefeasibility protects the RM
default under mtg purchaser
if there is a default under the mtg and the mee decides to exercise the power of sale the purchaser…
- Deemed to know of the rm
- Morgatee has indefsiailty of title
- Pur sole remedy is to sue for brecah of contract
- Purchase price reduced by the mortagge
peirce v morris
court confirmed that a purchaser who party to an executory contract (settlement not yet occurred) still has the obligation to pay money and right to redeem the mtg
leaser - tarn v turner
- tenant in a fixed term lease would be entitled to exercise the right to redeem if mor has granted a lease
s51 pla
indefeasibly - a title that cannot be set aside
- protects the title however doesn’t validate or invalidate the loan agt if forged
s97 pla
- who does it apply to
right to redeem
1. current mor
2. interest in mrtged prop
3. current or former mor/ covenanters
s97 pla
-rule
redeem property at anytime b4 prop sold under Power of sale by mee or receiver
- mee must discharge the property upon payment of all amnts and all obligations
s98 pla
if mtg term not yet expired and no steps to realise the security ( no possession and no receiver appt) the amounts owed include interest for the unexpired portion of the term
s99 pla
after mtg expired
- mee has 60 working days written notice b4 redeeming
or
- pay 3 months interest at agreed rate
s99 doesn’t apply if
-mee in possession
- had appt receivers
- taken steps to realize the security
s4 pla
- person who is entitled to redeem is
- current mor
- former mee
- covenanter associated with the mtg
unregistered mtg - forged
if the mtg is unregistered doesn’t get indefeasible title under s51 lta
- the forged loan agt unenforceable against true owner so is the mtg
- mee cannot seek repayment from the ro
unregistered mtg - forged e.g
duncan v Mcdonald
duncan v Mcdonald
- unregistered mtg provides no enforceable rights against the true owner, incl the inability to sell the land
registered mtg - forged
- mee gains indefeasible title under the SI but personal liability for the RO still remain unaffected by reg. it validate the power of sale
registered mtg - forged e.g
Frazer and walker
Frazer and walker
even though the mtg forged, once registered the mee acquires indefeasible title
- mee was able to sell the property to walkers and sale was valid bc indefeasibility
- mee indefeasible title only apply to si not underlying forged contract
fixed sum mtg e.g.
duncan v Mcdonald
duncan v Mcdonald
if the proceeds from the sale are insufficient, mee cannot sue true owner to recover the funds
- forged = unenforceable
- mee seek compensation under lta for losses incurred to indefeasibility rule
all obligations mtg e.g.
westpac v clark
duncan v Mcdonald
- sc confirmed that promises to pay specific amounts in unregistered loan agt could be incorporated into registered short form and memorandum if within the definition
- but, loan agt forged so the ‘you’ in mtg documentation applied to the rogue and therefor the rogues promise to repay the loan agt not incorporated into a reg document
