Section 58(3) of the Real Property Act 1900 (NSW) applies to any person into whose hands surplus proceeds of a mortgagee sale come, not only the selling mortgagee. However, 'subsequent mortgages' in s 58(3) means only registered mortgages — unregistered mortgagees are accommodated through equitable principles that modify the operation of s 58(3), not through the section itself. A non-selling mortgagee holding surplus proceeds owes fiduciary obligations to all subsequent interest holders and the mortgagor, and must not pay the surplus to a party not entitled to it. Where competing claims exist, the mortgagee should pay the surplus into court rather than paying it to one claimant on the basis of an indemnity.
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