Hung v Aquamore Credit Equity Pty Ltd

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Hung v Aquamore Credit Equity Pty Ltd [2022] NSWCA 272

Hearing dates:

10 October 2022

Date of orders:

16 December 2022

Decision date:

16 December 2022

Before:

Ward P at [1];
Macfarlan JA at [2];
Mitchelmore JA at [52]

Decision:

Appeal dismissed, with costs.

Catchwords:

MORTGAGES AND SECURITIES — mortgagee’s power of sale — whether mortgagee failed to act in good faith or take all reasonable care to sell property for not less than market value — significance of expert valuation evidence as to market price of property — no error in primary judge’s preference for respondents’ expert valuation evidence

Legislation Cited:

Corporations Act 2001 (Cth), ss 9, 420A

Environmental Planning and Assessment Act 1979 (NSW), ss 4.55, 4.56, 56

Real Property Act 1900 (NSW), ss 57, 58

Cases Cited:

ACES Sogutlu Holdings Pty Ltd (in liq) vCommonwealth Bank of Australia (2014) 89 NSWLR 209; [2014] NSWCA 402

Boz One Pty Ltd v McLellan [2015] VSCA 68; (2015) 105 ACSR 325

Investec Bank (Australia) Ltd v Glodale Pty Ltd (2009) 24 VR 617; [2009] VSCA 97

Stockl v Rigura Pty Ltd [2004] NSWCA 73

Category:

Principal judgment

Parties:

Edgar Hung (First Appellant)
Trevor Chappell (Second Appellant)
First on First Development Pty Ltd (Third Appellant)

Aquamore Credit Equity Pty Ltd (First Respondent)
Hsu Allen (Second Respondent)
Zachary Chang (Third Respondent)

Representation:

Counsel:
F Corsaro SC (Appellants)
J Hogan-Doran SC/R Sud (Respondents)

Solicitors:
Tzovaras Legal Australia Pty Ltd (Appellants)
Independent Legal (Respondent)

File Number(s):

2022/12119
2022/219950

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law

Citation:

[2021] NSWSC 1681

Date of Decision:

21 December 2021

Before:

Meagher JA

File Number(s):

2019/371915
2020/341930

HEADNOTE

[This headnote is not to be read as part of the judgment]

In 2016 Aquamore (the first respondent) entered into a Facility Agreement with First on First (the third appellant) pursuant to which Aquamore advanced $8,925,000 to it. As security, Aquamore obtained a mortgage from First on First over a property in the Blacktown CBD and guarantees from the directors (the first and second appellant). Following Aquamore’s service of a purported notice of default (that was ultimately found to be invalid), Aquamore took possession of the property with a view to exercising its power of sale as mortgagee. The property was ultimately sold for $10 million, no step having been taken by the mortgagor or the guarantors to restrain the sale.

Aquamore commenced proceedings against the guarantors claiming an amount still outstanding. First on First commenced proceedings against Aquamore and two of its directors alleging that Aquamore had breached its general law and statutory duties in selling the secured property and that Aquamore’s directors had breached duties they owed to the mortgagor.

In seeking to prove the market value of the property, Aquamore relied on the expert evidence of Mr Ellis and First on First relied on that of Mr Wood. Mr Ellis valued the property at $9,825,000 while Mr Wood…