In the courts

Australian mortgagee sales expected to achieve market value
The Supreme Court of Australia has determined that the duty expressed in the Australian Corporations Act 2001 (Cth) is to take all reasonable care to sell the property for not less than market value.

Mortgagee sale at a lower price than the first offer was not a breach of the Property Law Act
The High Court has held that any hindsight indication that it might have been better to sell at an earlier and higher offer was irrelevant in terms of the mortgagee's duties under the Property Law Act 2007.

Transfer of home to family trust was alienation with intent to defraud creditor
A successful appeal against a decision of the Court of Appeal that transfer of a family home to a family trust was not an alienation with intent to defraud a creditor.

Guarantor successfully argues breach of equitable duty of mortgagee to obtain best price at sale
This case was not heard in respect of the new Property Law Act 2007, which contains obligations on mortgagees to guarantors. However, the guarantor still successfully argued a breach of equitable duty on behalf of the mortgagee to obtain the best price at mortgagee sale.

Rights of subrogation allowed creditor to change its claim in a liquidation from unsecured creditor to secured creditor
A lender, who was previously unaware of its rights of subrogation in respect of a senior lender's security, was able to claim as a secured creditor.

Is notice of default an acceleration of debt in terms of an intercreditor deed?
This case was about whether or not a letter of default sent to a debtor by a junior creditor contravened the "no acceleration" provision of an intercreditor deed.

No set-off by guarantor against lessor
Whether or not a guarantor's claim against a lessor was valid, a no set-off clause in both the lease and the guarantee precluded her from setting-off amounts that might have been owed by the lessor against unpaid rent and other outgoings.

Enquiries and information

For more information on any of the cases, articles and features in Financial Services Quarterly, please email Rachel Gowing or call on 64 9 916 8825.