Price v Spoor

The High Court of Australia considered an appeal concerning the enforceability of mortgage clauses that purported to prevent mortgagors from relying on statutory limitation periods. The mortgagors had failed to repay a loan secured by mortgages over land, and the mortgagees commenced proceedings to recover the outstanding monies and possession of the land. The mortgagors contended that the mortgagees' claims were statute-barred under the *Limitation of Actions Act 1974* (Qld), arguing that their title under the mortgages had been extinguished by operation of s 24 of the Act. The mortgagees, however, relied on clause 24 of the mortgages, which they argued precluded the mortgagors from pleading any defence under the Act.

The central legal issues before the High Court were whether clause 24 of the mortgages was effective to prevent the mortgagors from relying on the *Limitation of Actions Act*, whether such an agreement was unenforceable as contrary to public policy, and whether s 24 of the Act operated automatically to extinguish the mortgagees' title upon the expiry of the relevant limitation period, thereby confining the mortgagees' remedy to damages for breach of contract.

The High Court affirmed the principle that while parties may generally contract out of statutory rights, this is not permissible if the statutory provisions are dictated by public policy and enacted for considerations of State rather than for the benefit of individuals. Applying this principle, the Court held that the *Limitation of Actions Act* was not enacted for the private benefit of individuals, but rather for broader public policy reasons, including the promotion of finality in litigation. Consequently, clause 24 of the mortgages, which sought to prevent the mortgagors from pleading the statute of limitations, was found to be ineffective and void as contrary to public policy. The Court also confirmed that s 24 of the Act operates automatically to extinguish title upon the expiry of the limitation period, irrespective of any contractual provisions attempting to waive such rights.

The appeal was dismissed with costs.