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AA PROP 203 > security 5+6 > Flashcards

security 5+6 Flashcards

1
Q

lta mtg def obli

A

mtg can secure obligations beyond the repayment of money
e.g. perfomance or contractual duties

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2
Q

freedom of contract vs equity

A

FOC- supports enforceable collateral advantages
equity - once debt is payed, mor is free from conditions tied to the mtg

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3
Q

kreiglinger approach

A
  1. is it unconsionable
  2. is it a penal clause
  3. is it repugnant
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4
Q
  1. is it unconsionable
    kreiglinger approach
A
  • equity set aside uncon contracts
  • handled under the CCCFA
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5
Q
  1. is it a penal clause
    kreiglinger approach
A
  • punishment for failure 2 meet terms is inconsistent with equitable right of redemption
  • if additional cost after default, could be penal and contradict equitable or contractual ROR
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6
Q
  1. is it repugnant
    kreiglinger approach
A
  • contradicts both equitable and contractual ROR
  • clause w/ unfair advantage beyond the contractual term
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7
Q

clogs

A

clog is something that interferes, restricts, defeats MOR equitable ROR

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8
Q

kreiglinger case facts

A
  • wool broker, sheep skin as by product of meat works
  • ## wool brokers give loan to meat works and agree that wool brokers have ROFR on the sheep skins
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9
Q

kreiglinger case what is the Coll adv

A
  • ROFR to sheep skins
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10
Q

kreiglinger case held

A
  • valid after the mtg
  • col adv was seperate to the mtg, two seperate doc
  • rained valid for the term
  • transaction was commercial, ROFR was primary, mtg secondary
    NOT A CLOG ON EROR
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11
Q

REEVE v Lisle

A

primary transaction was option to enter partnership and the mtg was secondary, was there only to protect the transaction if it fails

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12
Q

Noakes v rice issue

A
  • requirement to buy liquor from the brewery (coll adv) could continue after mtg was repaid
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13
Q

Noakes v rice HOL decision

A
  • the Coll adv was valid until mtg was paid
  • ## was making a free public house a tied public house and this is not the same property
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14
Q

collateral adv can …

A

be valid until mtg relayed but after the term if they are informed they are seen as penal and a clog on the EROR

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15
Q

Bradley v Carrit facts

A
  • tea broker lender so could take security over shares in tea company and ensure broker was main supplier of tea
    -mee to be compensate if mor failed
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16
Q

Bradley v Carrit HOL decision

A
  • Coll adv could not continue after the loan was repayed
    -deemed clog on EROR bc it continued beyond repayment
  • it imposed on going restrictions on how shares could be used
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17
Q

Bradley v Carrit and noakes v rice

A

no control over the shares and not being a free public house are the same

18
Q

limits on the collateral approach case

A

Lewis v frank love
jones v Morgan

19
Q

Lewis v frank love facts

A
  • mee feel into default
  • transfer of existing mtg was made
  • new mee required mor to grant option to purchase property
20
Q

Lewis v frank love held

A

court ruled that the option was a clog on the EROR and rejected it was part of contract
- opt to purchase tied to mtg are clog unless part or primary transaction

21
Q

jones v Morgan facts

A
  • mor sold land to reduce debt
  • mee agreed to release the part of security but required that half of the remaining land in trust for them
22
Q

jones v Morgan held

A

court held that it was a clog
- bc the terms varied the EROR
as it required payment of the debt PLUS half remaining property, unfair restriction

23
Q

MEE remedies against MOR in default

A
  1. sue
  2. enter into poss
  3. sell mtg prop
  4. appt receivers
24
Q

MEE remedies against MOR in default
1. sue

A

sue for breach of personal covenant ( promise to repay)
- no need for personal promise sometimes

25
Q

MEE remedies against MOR in default
2. enter into poss

A

under s137 pla, a mee can enter into poss of mtg prop, with express power in mtg

26
Q

MEE remedies against MOR in default
3. sell mtg prop

A

power to sell in mtg document
- mee cannot purchase property via private sale

27
Q

MEE remedies against MOR in default
4. appt receivers

A
  • if the mor is a company, the mee may have power to appt receivers to manage the property
28
Q

safeguards for the MOR

A
  1. default req
  2. PLA notice, s119 pla
  3. right to redeem s97
  4. mee duties
29
Q

safeguards for the MOR
1. default req

A
  • can only take action when the mor has DEFAULTED
30
Q

safeguards for the MOR
2. PLA notice, s119 pla

A
  • warning issued to mor
    -notice of mee intention to excercsie powers
31
Q

safeguards for the MOR
3. right to redeem s97

A
  • mor can redeem (repay and claim) at any time b4 the sale
32
Q

safeguards for the MOR
4. mee duties

A
  • obtain the best price at time of sale
  • act in good faith
33
Q

apple feilds v Damesh DOC

A
  • the court said that DOC under s176 PLA does not limit the basic equitable rule that the mee decides how to sell the mtg property
34
Q

apple feilds v Damesh price

A
  • ## mee not obliged to sell at highest only best possible price at the time of sale
35
Q

apple feilds v Damesh possesion

A
  • mee not to request to obtain orders for possession to remove the mor from prop b4 selling
  • mee can sell even if mor is still in possession
36
Q

mee remedy against trespassers case

A

Lockwood homes

37
Q

Lockwood homes

A
  • bank could pursue against Lockwood as the builders default occurred after the removal of the show home affirming the mee vulnerable position and need for protection
38
Q

mee remedy against trespass

A
  • mee can take action against trespasser if they are in possession of the property
  • on LW mee didn’t possesion at the Time of act
39
Q

mee remedy against trespass by relation

A
  • mee can establsh a r2ip at the time if trespass, may have right 2 sue
40
Q

mee remedy against trespass continuing

A
  • occurs when a trespasser continues to act unlawfully on mtg prop after the mee acquires possession
41
Q

trespass for damage 2 reversion

A

need to show PERMANENT damage
- in Lockwood show that the home is more valuable with the show home

42
Q

cousins v Wilson

A
  • Purchaser can not make a trespass claim against third party as does not have possession of the property yet and cannot make a reversionary claim because an equitable interest is not a common law interest.

AA PROP 203 (59 decks)

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