MBF Investments Pty Ltd v Nolan

(2011) 37 VR 116; [2011] VSCA 114

Victorian Court of Appeal

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For Australian Law.

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Interrogate

Catchwords

1. Mortgages
2. › Statutory power of sale
3. › Scope of mortgagee's duty
4. › Duty to sell in good faith and having regard to interests of mortgagor
5. › Whether duty extends beyond obtaining best price
6. › Whether mortgagor has 'home occupation interest'
7. › Relevance of international instruments to interpretation of statutory duty
8. › Transfer of Land Act 1958 (Vic), s 77(1)
1. Mortgages
2. › Statutory power of sale
3. › Order of sale of subdivided lots
4. › Whether mortgagee required to sell vacant lots before house lot
5. › Whether fair market value obtained at auction
6. › Whether sale causative of loss
7. › Transfer of Land Act 1958 (Vic), s 77(1)
1. Contract
2. › Construction
3. › Exclusion clause
4. › Deed of settlement
5. › Limitation of duty owed by mortgagee
6. › Waiver of liability arising from exercise of statutory power of sale
7. › Whether deed effective to exclude statutory duty
1. Damages
2. › Breach of mortgagee's duty
3. › Nature of remedy for improper exercise of power of sale
4. › Measure of loss and damage
5. › Whether increase in value of property wrongfully sold recoverable
6. › Duty to mitigate
7. › Transfer of Land Act 1958 (Vic), s 77(4)

Quick Take

A mortgagee exercising its power of sale under s 77(1) of the Transfer of Land Act 1958 (Vic) is required only to take reasonable steps to obtain the best price for the property; the duty does not extend to having regard to a mortgagor's interest in continuing to occupy the property as a home. International human rights instruments do not expand this duty. Where fair market value is obtained at auction, the mortgagor's remedy is limited and a duty to mitigate by purchasing alternative property applies. The proper remedy for breach of s 77 is equitable accounting, not common law damages for loss of capital appreciation.