King Investment Solutions v Hussain

In King Investment Solutions v Hussain, the respondent, as the first mortgagee, had an interest in a property which was subject to a second mortgage held by the appellant. The dispute centred around the rights and remedies available to the appellant as the second mortgagee. The matter was heard in the Supreme Court of New South Wales. The appellant sought an order for the sale of the property, claiming that they were an unregistered second mortgagee under the Real Property Act 1900. The legal issues the court had to decide included the applicability of section 103 of the Conveyancing Act 1919, the court's equitable jurisdiction to order a sale, and whether the service of notice under sections 57(2)(b) of the Real Property Act or 111(2)(b) of the Conveyancing Act was a necessary precondition for the court's power of sale. Furthermore, the court had to consider whether it could make an order for the sale in the absence of the first mortgagee and if it could order the sale of the entire interest in the land, rather than just the land subject to the first mortgagee's interest.

The court held that an unregistered second mortgagee of Real Property Act land is not entitled to an order for possession and a writ of possession, nor are they entitled to specific performance of a covenant to deliver possession upon default. Regarding the power of sale, the court concluded that while section 103 of the Conveyancing Act 1919 did not apply to unregistered second mortgagees, the court did have equitable jurisdiction to make an order for sale. The court determined that the service of notice under sections 57(2)(b) or 111(2)(b) was not a precondition for exercising the court's power of sale. However, the court held that it could not make an order for sale in the absence of the first mortgagee and could only order the sale of the land subject to the first mortgagee's interest. The court also emphasised the need for evidence of the property's value and the amount owed to the first mortgagee. Finally, the court addressed the penalty clause in the mortgage agreement, finding it was not a penalty.

The court further considered the procedural aspects of the case, including the admission of further evidence, the finality of an order for summary judgment, and the circumstances under which special circumstances would allow for the admission of further evidence on an appeal from a summary judgment. The court also examined the power of the Supreme Court to make orders in chambers and on the basis that reasons would be delivered later. The court made orders for the admission of further evidence and allowed the appeal against the summary judgment, directing a new trial. The court also made orders regarding the procedure for the new trial, including the matters to be provided for in the order for sale.