Avery v Saree Holdings Ltd; Lava Ltd v Avery (No. 3)

The case of Avery v Saree Holdings Ltd; Lava Ltd v Avery (No. 3) involved a dispute over whether certain funds amounting to NZ$309,507 paid to the mortgagor were advanced by the mortgagee as part of the mortgage or if they were merely third-party funds. The matter was heard in the High Court of Australia. The plaintiffs, Saree Holdings Ltd and Lava Ltd, sought to enforce a mortgage against the defendant, Avery, and claimed that the funds in question were part of the mortgage debt. Conversely, Avery argued that the funds were not part of the mortgage debt, as they were paid to him on behalf of a third party and not advanced by the mortgagee.

The court was tasked with determining the nature of the funds and whether they were part of the mortgage debt. Specifically, the court needed to decide if the NZ$309,507 were advanced by the mortgagee as part of the mortgage or if they were merely third-party funds paid to the mortgagor. This required a careful examination of the transactions and the evidence presented by both parties.

The High Court found that the NZ$309,507 were not advanced to the mortgagor by the mortgagee and thus were not owing under the mortgage. The court concluded that the funds were paid to the mortgagor on behalf of a third party and did not form part of the mortgage debt. The reasoning involved a detailed analysis of the transaction records and the evidence presented, which demonstrated that the funds were not part of the mortgage arrangement. The court's decision was based on the clear distinction between funds advanced as part of the mortgage and those paid as a third-party transaction.

As a result of the court's decision, the plaintiffs' claims were dismissed. The court's ruling confirmed that the NZ$309,507 were not owing under the mortgage, thereby relieving the defendant of any liability in respect of those funds.