First Mortgage Managed Investments Pty Limited v Pittman (No 3)

In *First Mortgage Managed Investments Pty Limited v Pittman (No 3)*, the New South Wales Court of Appeal considered the consequential orders to be made following its earlier decision that a loan agreement was unjust under the Contracts Review Act 1980 (NSW). The dispute concerned the extent to which the borrowers, Mr and Mrs Pittman, should be required to repay the principal sum and interest, and whether the lender, First Mortgage Managed Investments Pty Limited (FMI), was entitled to security for those amounts.

The Court was required to determine the appropriate sum to be awarded to FMI, specifically whether it should include interest on the portion of the loan funds used by the Pittmans to discharge prior mortgages. Furthermore, the Court had to decide whether FMI was entitled to be granted security over the properties that had been subject to those discharged mortgages.

The Court reasoned that FMI should be restored to the position it would have occupied had the primary judge not made orders requiring the discharge of mortgages over certain properties. Accordingly, FMI was granted judgment for a specific sum, which included the principal amount used to discharge prior mortgages and interest calculated thereon. The Court also ordered the Pittmans to deliver certificates of title and execute new mortgages in favour of FMI over two of the properties to secure the judgment sum, with provisions for the Registrar of the Court of Appeal to execute these mortgages in the event of default.

The Court made orders setting aside a previous order, amending another, and granting judgment for FMI against the respondents for $1,951,266.00, payable within six months. The orders also mandated the delivery of certificates of title and the execution of new mortgages over specific properties to secure this judgment sum, with the Registrar empowered to execute them in case of default. The judgment sum was declared to be the amount owing and secured by the mortgages over the specified properties. Upon payment of the judgment sum and post-judgment interest, FMI was to provide discharges of the newly registered mortgages and the existing mortgage over a third property.