Bassanese v Perpetual Trustees Victoria Ltd

The case of Bassanese v Perpetual Trustees Victoria Ltd involved a dispute between the mortgagor, Bassanese, and the mortgagee, Perpetual Trustees Victoria Ltd, over a provision in the mortgage allowing the mortgagee to recover enforcement expenses. The mortgagor sought relief from this provision under the Contracts Review Act, arguing it was unfair. The matter was heard in the Supreme Court of Victoria. The legal issues centred on whether the provision raised a serious question to be tried and whether the mortgagor could be relieved from the mortgage upon redemption, with the court drawing an analogy to mortgages securing contingent liabilities.

The court considered whether the provision in question, which allowed the mortgagee to recover enforcement expenses, was unfair and whether it constituted a serious question to be tried. The court examined whether such expenses should be recoverable only when the mortgagee actively chose to enforce the security. The court found that the provision did raise a serious question to be tried, as it was arguable that the mortgagor should not be liable for enforcement expenses unless the mortgagee actively chose to enforce the mortgage. The court also noted that the analogy to mortgages securing contingent liabilities supported the view that relief could be provided upon payment into court of an amount sufficient to cover potential enforcement expenses.

The court ruled that the mortgagor could be relieved from the mortgage provision on the condition that they paid into court an amount deemed sufficient to cover enforcement expenses. This decision provided a practical solution that balanced the interests of both parties, allowing the mortgagor to redeem the mortgage while ensuring the mortgagee's potential costs were covered. The court's decision provided clarity on the application of the Contracts Review Act in the context of mortgage provisions concerning enforcement expenses. The final orders were that the mortgagor could redeem the mortgage upon payment into court of an amount sufficient to cover enforcement expenses.