Cox v Esanda Finance

Cox, a developer, entered into a financing agreement with Esanda Finance for the development of a subdivision. Esanda initially provided funds for the project but later refused to offer further financing, leading to the project's failure. Cox sued Esanda for misleading conduct, fraudulent representation, and undue pressure in the release of a mortgage. The court was required to determine if Esanda's refusal to finance the project was unreasonable, if the deed of release was void due to undue pressure, and if Esanda acted in good faith when executing a mortgage and a power of sale.

The court found that Esanda's refusal to provide additional funds was unreasonable and constituted misleading and deceptive conduct. The deed of release was also deemed void due to the undue pressure exerted by Esanda. The court further held that Esanda's exercise of the power of attorney clause in the mortgage to secure payment was valid. The mortgage executed and registered after the notice under section 57 and before the transfer in exercise of the power of sale was considered bona fide. Lastly, the court determined that Esanda's conversion of the allotments did not amount to a breach of the agreement.

The court ordered Esanda to compensate Cox for the losses suffered due to misleading and deceptive conduct. The deed of release was declared void, and Esanda was prohibited from enforcing the power of sale. Esanda was also required to compensate Cox for any damages resulting from the conversion of the allotments.