Cliffshaw Pty Ltd v Old Kiama Wharf Company Pty Ltd

In the matter of Cliffshaw Pty Ltd versus Old Kiama Wharf Company Pty Ltd, the dispute centred around a lease of crown land, specifically whether a notice of intention to exercise the power of sale under a mortgage could be validly served prior to the ministerial consent to the mortgage being obtained, and before the mortgage was registered. The case was heard in the Supreme Court of New South Wales. The Old Kiama Wharf Company, the lessee of the crown land, executed a mortgage over the lease to Cliffshaw Pty Ltd, subject to obtaining the required ministerial consent. Before this consent was granted and the mortgage registered, Cliffshaw served a notice of intention to exercise the power of sale under the mortgage, initiating enforcement proceedings. The Old Kiama Wharf Company contended that the notice of intention was ineffective due to the lack of ministerial consent and the mortgage not being registered at the time the notice was served.

The court was tasked with determining whether the notice of intention to exercise the power of sale under the mortgage was null and void because it was served prior to the ministerial consent and registration of the mortgage. Additionally, the court needed to assess whether the mortgagor could rely on the terms of the ministerial consent, which required the mortgagee to notify the minister of any intention to take enforcement action, to invalidate the notice of intention. The court had to navigate the interplay between the statutory requirements for mortgaging crown land and the common law principles concerning the validity of notices under a mortgage.

The court held that the notice of intention to exercise the power of sale under the mortgage was not a nullity despite being served prior to the ministerial consent and registration of the mortgage. The court reasoned that the statutory requirements for mortgaging crown land did not render a notice of intention void if served before the mortgage was registered, provided that the notice was valid in other respects. Furthermore, the court found that the mortgagor could not rely on the ministerial consent term, which mandated notification to the minister, to invalidate the notice of intention. The court held that the terms of the ministerial consent did not confer a benefit to the mortgagor to invalidate the notice of intention. Consequently, the notice of intention was valid, and the enforcement proceedings initiated by Cliffshaw were not rendered void by the timing of the notice in relation to the ministerial consent and registration of the mortgage.

The court ordered that the enforcement proceedings against Old Kiama Wharf Company could proceed, and the notice of intention to exercise the power of sale under the mortgage remained valid despite the timing issues. The court emphasised that the ministerial consent terms did not provide the mortgagor with a defence to the enforcement of the mortgage.