Emerson v Custom Credit Corporation Limited

[1992] QCA 154

IN THE COURT OF APPEAL

[1992] QCA 154

SUPREME COURT OF QUEENSLAND

No. 1436 of 1985

BETWEEN:

JOSEPH FRANCIS EMERSON and

WILMA LUCY EMERSON

(Plaintiffs) Respondents

AND:

CUSTOM CREDIT CORPORATION LIMITED

(Defendant) Appellant

JUDGMENT - PINCUS J.A.

Delivered the Twenty-second day of June 1992

I have read the reasons of Davies J.A. and Williams J.;
their Honours' explanation of the facts of the case and the
issues litigated makes it unnecessary for me to repeat that

material. I would, for the reasons briefly stated below,

allow the appeal.

The majority say that the case turned on whether Rafter's evidence proved a market value of $1m; I respectfully agree. The learned primary judge was impressed with Rafter as a witness, but it is my opinion that his Honour should not have accepted his evidence as constituting a sufficient foundation for a finding of liability in the appellant.

Rafter's valuation says that the value of the "land plus buildings" - i.e. the physical assets themselves - was precisely equal to a valuation based on capitalisation of profits. This happy coincidence should not be allowed to obscure the important point that purchasers of this kind of property require a reasonable return in income for their capital investment and their work. The history of the motel, looking at it broadly, was not such as to encourage the thought that it was particularly profitable. The respondents bought it for $440,000 in 1982, improved and added to it and sold it to Horne for a little over $1m in mid-1983. He was unable to meet his obligations and so it was sold (the sale which according to the findings of the learned primary judge should have been at $1m) to the Mahaffeys for a price which was, in reality, $800,000. The Mahaffeys were also unable to meet their obligations. When one adds to this rather dismal picture the fact that the respondents' tax return for the year in which they had the motel suggests that they made very little money in it, ground is discernible for the suspicion that an informed purchaser would not, at the relevant time, have paid $1m for it. On the findings, there was discreditable conduct on the part of the appellant in selling at a "nominal" figure of $1m to the Mahaffeys while intending to receive only $800,000. That, however, cannot make Rafter's valuation acceptable.

It is necessary to examine the basis of Rafter's valuation, insofar as it was based upon capitalisation of profits. Ordinarily one would expect a valuer to work from the figures for a number of years before the valuation date, to guard against taking too much from one untypical good or bad year. Indeed, it is surprising that the finance company for whom Rafter did the subject valuation was prepared to accept one based, one might say, on only one year's returns; but so to describe the valuation is to understate the strength of the appellant's case. Rafter did not, in truth, work from one year's actual returns; he made what he called projections from those returns, which involved the assumption that the occupancy rate would increase by one half. The proposition that a purchaser would, acting prudently, have been inclined to pay a price calculated on that basis is hard to accept.

If, as Rafter suggested, the one year he had taken, in which the occupancy rate was 40%, was not one in which there was "good average management", one might have expected him to look at the occupancy rate achieved by the respondents themselves, when they had the motel. There was no suggestion that they had done any better than Horne in this respect and it appears from the evidence that Horne's licence fee, reflecting the volume of liquor sales, was higher than the respondents'.

The respondents' experience in the motel was not had at any remote time, but concluded only a year before the date of Rafter's valuation. In a document 31 pages in length (plus annexures), Rafter provides no information with respect to the respondents' returns, they being the parties making the assertion, which was accepted, that the motel was worth $1m.

If, as Rafter thought, a purchaser who managed the place substantially better than Horne did would have been likely to increase the occupancy rate by half, that purchaser would surely not pay a price reflecting the whole benefit of that hypothetical increase, as Rafter assumed.

Even an optimistic purchaser would not be inclined to treat such a great increase in business, in the face of the very substantial competition with which the motel was faced, as a certainty, for the purpose of calculating price. Rafter also made the assumption that the "estimated gross income from weddings and functions for the seven month period ending January 1985 is $142,310". The seven month period was that immediately following Rafter's valuation date.

There was no evidence that anything of the kind was actually achieved. The $142,310 estimated income seems high when one considers that Rafter gave a figure for the gross return from all sources, for the full year ended 30 June 1984, which was only about twice that projected for weddings and functions for a seven month period.

The evidence of the respondents as to their returns was oddly vague and conflicting. Mr. Emerson said the turnover was $40,000 per month and his wife said $30,000. The tax return for the only full year in which the respondents ran the motel, that ended 30 June 1983, showed a net loss of about $55,000. To some extent, that figure is explicable in that a substantial amount of interest charges depressed it.

Nevertheless, it is worthy of note that there is an apparent gap of nearly $.25m between the tax return result and the annual rate derived from the figures on which, according to the evidence, the respondents sold to Horne. The latter show a net profit from the motel of about $118,364 in a period of 7½ months; assuming a uniform rate of earning, that would give a net profit of about $190,000 for a full year. The Court was left in the position that the respondents, who complained that the sale of the motel in 1984 was at too low a value, produced no reliable evidence of their own returns, although that would have helped in assessing value.

It is repetitive to say so, but that omission deprived the Court of evidence as to the performance of the motel in the year immediately preceding that which formed, in a sense, the basis of Rafter's valuation. Not only that, but the absence of any resolution of the sharp conflict between the tax return figure (which Mrs. Emerson said was based on the records of the business), and the figures on which Horne bought made it at least questionable to give weight to the sale to Horne as an indication of value; that was Rafter's No. 1 comparable sale. If the sale to Horne was, as it appears to me it necessarily was, thrown into doubt by the nature of the figures on which Horne bought, the purchase by the respondents themselves a year earlier became of more importance. The respondents bought for $440,000 (J.F. Emerson said $430,000) and spent a little under $150,000 during the whole of their occupancy on "repairs and renovations and renewals". In addition, they purchased for $800,000 adjoining land which was included in the sale to Horne. Making all due allowances, it appears that the cost in 1982 of what they sold to Horne in 1983 for $1,040,000 was less than $700,000.

It is desirable to mention another aspect of the case, apart from the acceptability of Rafter's capitalisation of returns valuation. That is the question of the degree of care exhibited by the appellant with a view to carrying out its statutory duty. Although the motel was advertised for sale on behalf of Horne, no special efforts were directed by the appellant towards obtaining a proper price. What it did, in my view, was to grasp the opportunity of selling to the Mahaffeys on the assumption that it was too risky to reject the Mahaffeys' offer, or defer acceptance of it. It seems plain that the appellant had no confidence in the prospect of obtaining a better price than the figure of (in effect) $800,000 which the Mahaffeys offered. Acceptance of the Mahaffeys' offer meant that the appellant would not itself be paid out, let alone the respondents; this does not appear to be a case in which, in selling as it did, the appellant as first mortgagee sacrificed the interests of the second mortgagees, by paying too great attention to its own interests. The appellant did not wish to lose the opportunity of a sale to the Mahaffeys, who had no money but had the advantage of an offer of finance based on Rafter's $1m valuation. The result of doing so was to transfer the problem to the new financier, F.A.I., which was prepared to advance $800,000 on Rafter's valuation.

In these unusual circumstances, the question arises whether, by grasping what it saw as a favourable opportunity to sell to the Mahaffeys, the appellant mortgagee can be said to have taken "reasonable care to ensure that the property [was] sold at the market value". An experienced dealer in real estate will sometimes sell with little or no delay if what is regarded as a satisfactory offer is available; a quick sale is not necessarily a bad one. But can doing nothing but exercising judgment, based upon knowledge of the market and the valuers' various opinions, satisfy the obligation imposed by s.85(1) of the Property Law Act 1974? Certainly, in the ordinary case, the mortgagee must be expected to advertise and otherwise make efforts to find a buyer at a good price, not merely to take the first offer which comes along. Whether what the appellant did in this case constituted taking reasonable care within the meaning of the statute need not, in my opinion, be decided; assuming that the appellant breached its statutory duty, no damage has been shown. It was not proved, in my respectful opinion, that the figure obtained was less than the market value.

Lastly, mention should be made of Rafter's evidence, given under cross-examination by Ms Kiefel Q.C., that a capitalisation figure of 20% "wouldn't be out of line" if he were asked to value on a mortgagee sale basis; Rafter in fact used a 17% rate. It was suggested that the judge should have adjusted Rafter's valuation in accordance with this evidence since the sale was, in fact, one by a mortgagee. This raises the question whether, on the proper construction of s.85(1), the Court can give effect to evidence that a mortgagee sale is likely to achieve a lower figure than an ordinary sale, in a particular case. The alternative view is that such evidence is irrelevant, because s.85(1) uses the expression "market value", which implies sale by an ordinary vendor.

It is my opinion that "market value" has indeed its ordinary meaning under the section, with the result that the mortgagee's obligation is to endeavour to obtain the ordinary market value, not any lower figure. But such evidence as Rafter gave, of the capitalisation rate on a mortgagee sale basis, was relevant. In my opinion, it was a piece of evidence which the trial judge was entitled to take into account in assessing whether the mortgagee had taken reasonable care as required by s.85(1). A finding that a mortgagee has attained such a price as one would expect a mortgagee to receive is at least some proof that reasonable care has been taken.

I would allow the appeal and set aside the judgment of the learned primary judge.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

No. 1436 of 1985

Before the Court of Appeal
Mr. Justice Pincus
Mr. Justice Davies

Mr. Justice Williams

BETWEEN:

JOSEPH FRANCIS EMERSON and

WILMA LUCY EMERSON

(Plaintiffs) Respondents

AND:

CUSTOM CREDIT CORPORATION LIMITED

(Defendant) Appellant

JUDGMENT - PINCUS J.A.

Delivered the Twenty-second day of June 1992

Counsel:	Keane Q.C., with him, Applegarth for the Appellant D. Cooper, with him, Francis for the Respondents
Solicitors:	Corrs Chambers Westgarth for the
Appellant
Lees Marshall & Warnick for the Respondents
Hearing Date(s):	13 April 1992

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	No. 1436 of 1985
BETWEEN:

JOSEPH FRANCIS EMERSON and

WILMA LUCY EMERSON

(Plaintiffs) Respondents

AND:

CUSTOM CREDIT CORPORATION LIMITED

(Defendant) Appellant

JOINT REASONS FOR JUDGMENT OF DAVIES J.A. AND WILLIAMS J.

Delivered the 22nd day of June 1992

This is an appeal and a cross-appeal from a judgment of de Jersey J. given on 1 November 1991 in which his Honour gave judgment for the respondents against the appellant for $130,178.99 with interest. The cross-appeal is against the way in which his Honour assessed interest and on costs.

The appellant was the first mortgagee of a motel property and associated land ("the property") of which the respondents were second mortgagees. The mortgagor was a Mr Horne. Pursuant to its power of sale the appellant sold the property to a Mr and Mrs Mahaffey for $1 million by a contract dated 4 October 1984. The contract provided for payment of the consideration by a deposit of $100, $800,000 on or before the date for completion (which the parties failed to fix), and the balance of $199,900 on or before a date which falls 18 months after that date. It is sufficient to mention at this stage that only $800,000 was paid and the respondent never had any expectation that any more than that sum would be paid.

The sole question on this appeal, leaving aside for the moment the question of interest raised by the cross-appeal, is whether the appellant, in selling the property pursuant to the exercise of its power of sale, discharged its duty under s. 85(1) of The Property Law Act 1974-1990 to take reasonable care to ensure that the property was sold at the market value. The trial judge held that it "took no reasonable step to secure the market value", that if it had "it would probably have secured a sale for $1 million for settlement at the same time as this contract settled" and that if that had occurred the respondent would have received the sum of $130,178.99, being the balance left after the appellant had reimbursed itself for its debt and other amounts recoverable under its mortgage.

The appellant advanced two primary submissions. The first of these was put in the alternative, depending on alternative views of the meaning of the term "market value" in s. 85(1). First, it said, the term "market value" in s. 85(1) is not the price which a willing but not anxious vendor would obtain from a person desiring to buy but the price which an anxious vendor would obtain upon a forced sale because a mortgagee is always an anxious vendor and a mortgagee sale is always a forced sale. Alternatively, it was said, the taking of reasonable care by a mortgagee may not achieve a sale at market value, even assuming market value to be the price which a willing but not anxious vendor would obtain. On either of these alternatives it was said that the appellant was not in breach of s. 85 in selling at $800,000.

Its second submission focussed on the evidence of Mr Rafter, a valuer, upon whose valuation the trial judge relied in concluding that the market value of the property at the time of sale was $1 million. Rafter's evidence, it was said, was inconsistent with the established or objective facts and therefore should have been rejected. The consequence, the appellant argues, is that the respondent did not prove that the market value was more than $800,000. It was common ground that unless it could be shown that by taking reasonable care the appellant ought to have sold the property at more than approximately $870,000, the respondent failed in the action.

The received view is that generally "the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring 'What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?'": Spencer v. The Commonwealth (1907) 5 C.L.R. 418 at 432; see also at 441. That approach has been applied as the correct way to find "value", "market value" and "market selling value" in various other contexts: see for example

Brisbane Water County Council v. Commissioner of Stamp

Duties (1979) 1 N.S.W.L.R. 320 at 324, Kin Kin Resorts Pty Ltd v. Water Authority (W.A.) (1990) W.A.R. 48 at 61, Peko-

Wallsend Operations Ltd v. Commissioner of State Taxation

(W.A.) (1988-1989) 20 A.T.R. 823 at 836, In the Marriage of Dunbar (1985-1987) 11 Fam.L.R. 901 at 911, Nisch Pty Ltd v. Commissioner of State Taxation (W.A.) (1989-1990) 21 A.T.R. 391, and Stanfield v. Brisbane City Council (1989-1990) 70 L.G.R.A. 392 at 412, 413 - value or market value,

Australasian Jam Co. Pty Ltd v. Federal Commissioner of

Taxation (1953) 88 C.L.R. 23 at 31, 32 - market selling value.

The context in which the phrase "market value" is used may indicate that the market in which the value is to be determined is one which has some special features. That is in one sense what the appellant in effect argues here. However there is no identifiable mortgagee's market; a mortgagee sells in the general real estate market. No doubt, as the appellant says, mortgagee's sales are often forced sales. But that is not invariably the case and sales by registered proprietors are also sometimes forced, perhaps often so in the current market. But we think that the purpose of a phrase such as "market value" is to enable a hypothetical value to be determined disregarding the desire to sell of particular vendors or classes of vendors. Furthermore, there is no suggestion in the common law cases concerning a mortgagee's duty that the phrase or any similar one should be construed as the appellant contends. In Cuckmere Brick Co. v. Mutual Finance Ltd (1971) 1 Ch. 949, for example, Salmon L.J. appears to have used the phrase "the true market value" and Cairns L.J. the phrase "proper price" in a general objective sense: see at 966, 978. Nor is there anything in the analyses of s. 85 in the various judgments in Commercial and General Acceptance Ltd. v. Nixon (1981) 152 C.L.R. 491 which would indicate any other meaning; see on the contrary at 495, 521, 525. The appellant put before us that part of the Report of the Queensland Law Reform Commission on Property Law Reform (QLRC 16) dealing with the proposed s. 85(1), but again the context indicates that the Commission thought that the term "market value" had a general objective meaning. In our view it has that meaning in s. 85(1). It is therefore unnecessary to consider the evidence of value of the property on the basis of a forced sale.

No doubt appreciating the difficulty in the above argument, Mr Keane Q.C. for the appellant put the alternative argument that a mortgagee is not necessarily in breach of the duty which s. 85 imposes because the sale does not occur at market value. The failure of that occurrence may be caused by other factors such as knowledge on the part of prospective purchasers that the sale is a forced sale or a choice made by the mortgagee to sell immediately rather than to wait. However, the difficulty with this argument from the appellant's point of view is that there appears to be other evidence that the appellant did not take reasonable care to ensure that the property was sold at market value.

It did not advertise it at all and it did not otherwise seek other possible prospective purchasers. Until it commenced to deal directly with Mr Mahaffey, with whom Horne had had two previous contracts, both of which had fallen through, it left the sale of the property entirely to Horne. Thereafter its efforts to sell consisted only of negotiating with Mahaffey. Its reason for this was, according to Mr Wedlake, its Operations Manager, Property Finance Division, that he believed, at least partly in reliance on the valuation of a Mr Hall, a valuer whom he regarded highly, that the mortgagee could not obtain a purchaser who would pay more than its mortgage debt. Although Wedlake put in train steps to sell the property by auction it appears that these were, in effect, conditional upon the failure of the sale to Mahaffey to settle at a real price of $800,000.

His Honour held that "At the time of the sale on 4 October 1984 Wedlake knew that there was in existence a valuation from the Ray White organisation putting a value of $1 million on the properties." That, he said, "should have alerted him to the importance of a proper investigation of market value, in light of the much lesser figure put on the property by Mr Hall." We see no reason to disagree with his Honour's reasoning in this respect. We mention in passing in this respect, though we do not think it necessary to rely on it, Wedlake's efforts to make the contract one for $1 million when he knew that no more than $800,000 would be paid.

Nevertheless the respondents were not entitled to succeed unless they established the correctness of that valuation from the Ray White organisation, that of Rafter, for his was the only valuation at more than $870,000.

In our opinion therefore the case turned, as his Honour thought it did, on whether Rafter's evidence proved a market value of the property of $1 million.

Rafter valued the property at $1 million in July 1984. He said that he knew of nothing which would change the valuation between that date and 4 October 1984. His valuation was made on alternative bases; on the basis of comparable sales and on capitalisation of projected profits.

His Honour thought that Rafter's valuation gave the most reliable view of market value of the property, especially because of his use of comparable sales. However, his Honour also relied on Rafter's capitalisation approach, concluding that his "more comprehensive analysis did in the end give a much more reliable indication of value than either of the others produced".

Rafter clearly made a considerable impression on his Honour, both by his written valuation and by his oral evidence which his Honour described as convincing, referring in this respect to Cuckmere Brick Co. at 960. In this area, as in that of primary fact, it is important not to underestimate the advantage of the trial judge.

In his valuation Rafter listed four comparable sales the first of which was the sale of the property by the respondents to Horne in 1983 for $1,040,000.

The appellant argued that in three respects the sale was unreliable. First, it was said, Rafter derived support from false profit figures given to Horne by the respondents, which differed markedly from those in the respondents' income tax returns. There was no evidence to show that Horne in fact relied on those figures. But in any event that is to misunderstand what Rafter said. He thought that Horne bought on a belief in the potential of the property to generate a net profit of $160,000, which potential Rafter thought the property had. There was no evidence as to whether or not Horne ever communicated to Rafter the basis for his belief.

Secondly, it was said that a substantial part of the consideration for the sale was the exchange of property which itself was overvalued; a motel having a notional price of $375,000 but sold the following year for $250,000 and land having a notional price of $70,000 but also sold in the following year for $50,000. But there was no evidence that any of this property had a value lower than its stated exchange value at the time of sale.

Thirdly, the appellant points to the fact that the respondents provided finance to Horne in the amount of $148,622 which was never repaid. However it is difficult to see how the provision of vendor finance or the subsequent failure to repay it can affect the reliability of the sale to establish value.

On the other hand, after Wedlake had inspected the property prior to this sale, the appellant advanced $724,000 on its security alone and in November 1983 advanced a further $61,000, again solely on the security of the property, in both cases pursuant to a lending policy of lending only up to 80% of the value of property.

In our view his Honour was entitled to rely upon the sale from the respondents to Horne as a comparable sale.

The appellant also criticised Rafter's reliance upon each of the other sales as comparable. However, whilst there were, not surprisingly, differences between each of the properties the subject of these sales and the property these differences were recognised in the valuation. The appellant also criticised Rafter for not taking into account, at least in his evidence, the Park Lane Motel, the sale of which occurred in early 1986 and which could not have been used by him in his written valuation as a comparable sale. However none of the facts relevant to that motel were ever proved.

The respondents also point out that, prior to the subject sale, the Mahaffeys had entered into several contracts to purchase the property at prices between $1 million and $1.3 million which failed to settle because of Horne's inability to perform.

The appellant was on stronger ground in criticising Rafter's capitalisation of projected profits. His Honour was, in our view, entitled to accept as correct the trading figures which Rafter produced from the books of account of the motel which he took away and studied, subject to an allowance which he should have made for rates. This was an oversight which he acknowledged; he had in fact made that allowance in his calculation of projected profits. Making an allowance for rates, the net profit for the 1984 financial year was a little over $117,000. His Honour was entitled to prefer Rafter's calculations to Mr Rowland's "extremely sketchy evidence" of a lower profit figure.

The difficulty in accepting Rafter's evidence on capitalisation of projected profits lies in converting the above sum into a projected annual profitability of $160,000, an increase of about 37 per cent. Clearly, Rafter thought that this sum indicated the profit earning capability of the property at the time of his valuation. There were a number of reasons for this. The restaurant had been closed for a month during the 1983 financial year, the western wing of the motel consisting of seven units had been unusable for several months whilst they were being upgraded, the road in front of the motel also underwent upgrading for several months of the year during which access to the motel was restricted, the use of the motel for functions had just got under way and there were good forward bookings, and the motel had only recently acquired the Hertz Rent-a-Car agency. In consequence he thought that, in addition to the increased profits from functions and the agency, the motel's occupancy would increase from about 40 per cent to about 60 per cent, thereby substantially increasing its profitability. He also thought that overall expenses seemed high in relation to gross profits and consequently suspected that some of the owner's personal expenses were included in the expenses of the business. These changes would bring it into line, he thought, with comparable motels. Although all of this seems fairly ambitious, Rafter was cross examined on it at considerable length, as he was upon his capitalisation rate of 17 per cent, and was able to give credible reasons for the course which he took in each case. As we have said already, his Honour was clearly impressed by Rafter's performance in the witness box.

Having regard to the facts that in 1983 and again in 1984 there was a purchaser willing to pay $1 million or more for the property, that in 1983 the appellant was prepared to advance nearly $800,000 on the security of the property pursuant to a lending policy permitting loans only up to 80% of the value, and that the appellant felt constrained to insert in the impugned contract a price of $1 million, we are not prepared to say that his Honour has misused the advantage which he had in seeing and hearing the witnesses, in particular Rafter. Accordingly, the appeal should be dismissed.

His Honour awarded interest on the judgment from 9 October 1984 to the date of judgment at six monthly rests at the various applicable bank interest rates set out in an exhibit before him. He did not capitalise that interest. He said that his selection of six monthly rests reflected his view as to how the plaintiffs would probably have invested the money had they received it and as to what was reasonable at the time he gave judgment. The respondents contend that interest should have been compounded because the appellant owed a fiduciary duty to the respondents and its serious breach of that duty resulted in the loss for which the judgment sum was awarded. They seek to spell that fiduciary duty out of trust reposed by the respondents in Wedlake that they would be paid out of the sale proceeds in consequence of which they were induced to remove their caveat. No such case was ever pleaded and no finding of fact was sought or made in respect of the circumstances in which the respondents removed their caveat. Nor do we think that any fiduciary duty existed on the facts found by his Honour. We therefore reject the respondents' argument that interest should have been capitalised.

The respondents then say that his Honour should have assessed interest at 15 per cent because that was an appropriate commercial rate and, more importantly, the rate payable under the respondents' mortgage from Horne. We do not see how Horne's mortgage rate can be relevant evidence of how the respondents would have invested any proceeds of sale nor was there any specific evidence as to how they would have done so. In the circumstances we do not think that the trial judge's exercise of discretion in this respect miscarried.

The other cross-appeal was against the order for party and party costs, the respondents asserting that the appellant should be ordered to pay indemnity costs because it had persisted in attempting to defend reprehensible behaviour. We think it did no more than defend an arguable case even if the circumstances in which the sale price was fixed may have involved reprehensible conduct.

Accordingly, we would dismiss the cross-appeal.

The appeal is dismissed with costs and the cross-appeal is also dismissed with costs.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	No. 1436 of 1985
Before the Court of Appeal
Mr Justice Pincus Mr Justice Davies Mr Justice Williams
BETWEEN:

JOSEPH FRANCIS EMERSON and

WILMA LUCY EMERSON

(Plaintiffs) Respondents

AND:

CUSTOM CREDIT CORPORATION LIMITED

(Defendant) Appellant

JOINT REASONS FOR JUDGMENT OF DAVIES J.A. AND WILLIAMS J.

Delivered the 22nd day of June 1992

MINUTE OF ORDER: Appeal dismissed with costs. Cross-

appeal dismissed with costs.

CATCHWORDS:	MORTGAGES - SALE UNDER POWER - appellant/mortgagee sold property of which respondents were second mortgagees pursuant to power of sale - whether appellant discharged duty to ensure sold at market value - whether 'market value' has general objective meaning - whether breach of fiduciary duty - whether interest on judgment sum ought be capitalised PROPERTY LAW ACT 1974 s. 85(1)
WORDS AND PHRASES - 'MARKET VALUE' - appellant/mortgagee sold property of which respondents were second mortgagees pursuant to power of sale - whether appellant discharged duty to ensure sold at market value - whether 'market value' has general objective meaning - whether breach of fiduciary duty - whether interest on judgment sum ought be capitalised PROPERTY LAW ACT 1974 s. 85(1)
INTEREST - DAMAGES - appellant/mortgagee sold property of which respondents were second mortgagees pursuant to power of sale - whether appellant discharged duty to ensure sold at market value - whether 'market value' has general objective meaning - whether breach of fiduciary duty - whether interest on judgment sum ought be capitalised PROPERTY LAW ACT 1974 s. 85(1)
Counsel:	P.A. Keane Q.C., with him P.D. Applegarth for the Appellant D.R. Cooper, with him C. Francis for the Respondents
Solicitors:	Corrs Chambers Westgarth for the Appellant Lees Marshall & Warnick for the Respondents
Hearing Date(s):	13 April 1992

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	No. 1436 of 1985
BETWEEN:

JOSEPH FRANCIS EMERSON and

WILMA LUCY EMERSON

(Plaintiffs) Respondents

AND:

CUSTOM CREDIT CORPORATION LIMITED

(Defendant) Appellant

__________________________________________________

__

PINCUS JA
DAVIES JA
WILLIAMS J
__________________________________________________

__

Reasons for Judgment of Pincus J.A., dissenting,
and Joint Reasons for Judgment of Davies J.A. and
Williams J. delivered the 22nd day of June 1992
__________________________________________________

__

'APPEAL DISMISSED WITH COSTS. CROSS-APPEAL
DISMISSED WITH COSTS.'