Bofinger & Anor v Kingsway Group Limited formerly Willis & Bowring Mortgage Investments Limited & Ors

The appeal concerned a dispute between the appellants, Mr. and Mrs. Bofinger, and the respondents, Kingsway Group Limited (formerly Willis & Bowring Mortgage Investments Limited) and others. The Bofingers sought to recover damages for alleged breaches of duty by the respondents in their capacity as mortgagees. The primary issue revolved around the respondents' conduct in exercising their power of sale over a property owned by the Bofingers.

The central legal questions before the Full Federal Court were whether the respondents had breached their duty to obtain a proper price for the mortgaged property when exercising their power of sale, and if so, whether the Bofingers had suffered loss as a result of such breaches. The court was required to consider the nature and extent of the duty owed by a mortgagee exercising its power of sale under the relevant legislation and common law.

The court analysed the conduct of the respondents in marketing and selling the property, paying close attention to whether they had acted in good faith and taken reasonable steps to obtain the best price reasonably obtainable in the circumstances. The judges considered the evidence presented regarding the valuation of the property, the marketing strategy employed, and the terms of the sale. They applied established legal principles concerning the mortgagee's duty, emphasising that while a mortgagee is not a trustee for the mortgagor, they must act with due diligence and fairness in the exercise of their power of sale.

The Full Federal Court ultimately found that the respondents had not breached their duty to obtain a proper price for the property. Consequently, the appeal was dismissed.