National Transport v Smith

National Transport was the mortgagee and Smith was the guarantor in relation to a property. Smith sought a declaration that the sale of the property by National Transport was void due to alleged lack of good faith or breach of duty to exercise reasonable care in the sale. The case was heard in the Federal Court of Australia. The primary legal issue the court needed to address was whether the mortgagee, National Transport, had acted in good faith and exercised reasonable care in the sale of the property. Additionally, the court considered whether the mortgagee was precluded from selling to a non-tenderer before the closure of the tender process and whether the conduct of the mortgagee in terms of the invitation to tender was misleading.

The court examined the terms of the invitation to tender and the sale process, and found that the mortgagee had not acted in good faith or exercised reasonable care in the sale. The court held that the mortgagee was precluded from selling to a non-tenderer prior to the closure of the tender process. Furthermore, the court found that the conduct of the mortgagee in terms of the invitation to tender was misleading. Consequently, the sale of the property was declared void.

The court's decision resulted in the sale of the property being declared void and Smith obtaining the declaration he sought. The court found that the mortgagee had breached its duties and acted in a manner that was not in good faith. Additionally, the court held that the conduct of the mortgagee in terms of the invitation to tender was misleading, which further contributed to the invalidity of the sale.