Property Law: Mortgages Flashcards

Practice flashcards covering the concepts, definitions, legal sections, and case law presented in the lecture notes on Mortgages.

What term is used in law to describe mortgages and easements as 'interests in land'?

A term of art.

Where are common law property interest mortgages registrable?

Under the Torrens system.

Which sections of the RPA provide protection for unregistered equitable mortgages as exceptions to indefeasibility?

$s\,71(d)$ and $s\,249$.

Which section of the RPA provides for caveating an unregistered mortgage interest?

$s\,191$.

What test do courts adopt to determine if a relationship constitutes a mortgage in unclear cases?

A substance test.

What are the four forms of security recognized at common law?

Pledge, Lien, Mortgage, and Charge.

What did a common law mortgage involve regarding the title of the land?

Transfer of title (possession) as security.

How is a charge defined in contrast to a mortgage?

A right of recourse to property (hypothecation) without transfer of title or possession.

What is the term for the borrower in a mortgage agreement?

Mortgagor ($M'or$).

What is the term for the lender in a mortgage agreement?

Mortgagee ($M'ee$).

At common law, what was the promise for re-conveyance upon payment of the debt called?

Proviso for re-conveyance on 'redemption'.

When does a mortgagee’s inherent right to possession begin at common law?

'As soon as the ink is dry on the mortgage'.

What interest does a common law mortgagor have left after conveying the legal estate to the mortgagee?

The equity of redemption ($EOR$).

How is 'equity in a house' defined in market terms?

The market value of the house less the debt secured by any existing mortgages.

What is the strict rule equity applied to protect the right to redeem?

'Once a mortgage always a mortgage'.

What effect does the equitable remedy of foreclosure have on a mortgagor?

It extinguishes the right to redeem.

Which case established that the court has discretion in balancing the opportunity to repay debt against the need to enforce?

Campbell v Holyland ($1878$).

What are 'collateral advantages' in a mortgage contract?

A covenant or benefit to the $M'ee$ over and above the repayment of mortgage monies.

Why was the clause in Fairclough v Swan Brewery Co Ltd ($1912$) struck down?

It was held to be a 'clog' on the $EOR$ because it only allowed redemption during the last $6$ weeks of the term.

How did the court treat the $40$-year redemption date in Knightsbridge Estates v Byrne ($1939$)?

It was upheld as a valid contractual bargain at the time it was entered into.

According to Kreglinger v New Patagonia Meat Company ($1914$), when is a collateral advantage struck down?

When it is a clog or fetter on the equitable right to redeem, repugnant to the right to redeem, or 'oppressive and unconscionable'.

Which case involved an option to purchase that was considered a clog on the right to redeem?

Samuel v Jarrah ($1904$).

What was the outcome of the 'tied brewery' case Toohey v Gunther ($1928$)?

The tie was not a clog because it only lasted as long as the mortgage.

What is the primary factor considered in modern NSW cases regarding clogs on redemption?

Unconscionability.

What does $s\,55B(2)$ of the LPA $1936$ state regarding collateral covenants in South Australia?

Any covenant collateral to the mortgage has no effect once the mortgage monies are repaid.

What case establishes that a contract for a legal mortgage evidenced in writing creates an equitable mortgage?

Walsh v Lonsdale.

Name a type of equitable mortgage involving secondary lending.

Mortgage of an equitable interest (e.g., a second mortgage).

Which case is associated with the equitable mortgage by deposit of title deeds?

Russel v Russel ($1783$).

Why was the provision for mortgage by deposit of title deeds removed for Torrens land in $2016$?

Because there is no certificate of title that can be deposited.

What power does a court have under $s\,43$ of the LPA $1936$ for an equitable mortgagee?

The court may vest land in the equitable $M'ee$ so that a sale may be conducted.

Which section of the RPA implies a covenant for the mortgagor to keep property in good repair?

$s\,130$ RPA.

Which sections of the RPA govern the creation of a registered mortgage?

$ss\,128-129$ RPA.

What is the consequence of a mortgagee failing to verify the authority of the mortgagor under $s\,128A$ RPA?

The mortgage will not be indefeasible under $s\,69(i)$ and it will be an offence.

Does a Torrens system mortgage operate as a transfer of land?

No, it has effect as security ($s\,132$ RPA).

How did Re Forrest Trust ($1953$) define a Torrens mortgage?

As a hypothec or statutory charge.

What is the most effective remedy when a mortgagor defaults?

The Power of Sale.

Which section of the RPA provides a statutory right to possession for the mortgagee after a default?

$s\,137$ RPA.

According to $s\,132$ and $s\,133$ of the RPA, how much default and notice is required for a power of sale?

One month ($1$) of default and one month ($1$) notice.

Whom does the surplus go to after the application of proceeds from a sale under $s\,135$ RPA?

The mortgagor ($M'or$).

What standard of care did the UK case Cuckmere Brick Co Ltd ($1971$) impose on mortgagees?

Negligence standard of care.

Under $s\,134$ RPA (SA), what is the position of a purchaser after registration regarding default or notice?

The purchaser is not concerned with whether default occurred or whether notice was given (indefeasibility).

What duty was established for mortgagees in Pendlebury v Colonial Mutual Life ($1912$)?

A duty to act in good faith ('not reckless') only.

What is required for foreclosure under the Torrens system in South Australia?

Applications to the Registrar-General, at least $6$ months arrears, and a preceding attempt to sell at public auction ($ss\,140-142$).

Can a mortgagee sue on personal covenants after foreclosure occurs?

No, according to $s\,55B(3)$ of the LPA $1936$.

What is a 'Receiver' in the context of mortgage remedies?

A manager who collects income from the property and uses it to pay off the mortgage debt.

According to $s\,53(2)$ of the LPA $1936$, whose agent is a receiver deemed to be?

The agent of the mortgagor ($M'or$).

What duty is imposed on controllers by $s\,420A$ of the Corporations Act $2001$?

A duty of reasonable care to get the best price reasonably obtainable or the market value.

What is the definition of consumer debt under the National Credit Code?

Credit for predominantly domestic purposes or for residential property investment for a natural person.

How many days must a default notice allow for a remedy before enforcement under $s\,88$ of the National Credit Code?

$30$ days.

Which section of the Australian Consumer Law ($ACL$) applies to misleading or deceptive conduct in property transactions?

$s\,18$ ACL.