REAL PROPERTY — mortgages — possession of land — mortgagee commenced proceedings seeking order for possession — subsequently enters into possession without order — interlocutory application to restrain auction
REAL PROPERTY — mortgages — default notice under s 57 of the Real Property Act 1900 — validity of notice — amount said to be due may exceed amount actually due by significant order of magnitude
REAL PROPERTY — mortgages — promise to pay daily amount upon default of obligation to pay instalment — high effective rate of interest — whether daily payment is void as a penalty
Quick Take
1A contractual obligation to pay $250 per day upon default of each instalment, yielding an effective rate of approximately 876% per annum, raises a prima facie case that the obligation is void as a penalty where no attempt is made to justify it as a genuine pre-estimate of loss.
2A default notice under s 57 of the Real Property Act 1900 (NSW) may be invalid where the amount claimed exceeds the amount actually due by an order of magnitude, following Clarke v Japan Machines, and where the notice fails to identify the specific covenant breached or misdescribes the nature of the amount claimed.
3The Inglis v Commonwealth Trading Bank principle requiring a mortgagor to pay the full amount claimed into court before restraining a mortgagee sale does not apply where there is a bona fide dispute about the validity of the mortgagee's entitlement to exercise the power of sale, including the validity of the s 57 notice.
