RHG Mortgage Corporation Ltd v Summerfield

RHG Mortgage Corporation Ltd (the mortgagee) sought possession of a property from Mr and Mrs Summerfield (the mortgagors) under a mortgage agreement. The mortgagors resisted the claim, arguing that the default notice issued by the mortgagee was defective and that the mortgagee could not rely on a default not specified in that notice. The matter came before the Court of Appeal of New South Wales, with Bathurst CJ, Gleeson and Brereton JJA presiding.

The central legal issues before the Court of Appeal were whether the default notice issued by the mortgagee complied with the requirements of the *National Credit Code* (Cth) and, if not, whether the mortgagee was nonetheless entitled to possession. Specifically, the Court had to determine if the mortgagee could rely on a default that was not particularised in the default notice, and how to construe a clause in the mortgage agreement that referred to a "condition" – whether it was a condition for retaining possession or a contractual obligation. The Court also considered the minimum requirements for evidentiary certificates.

The Court of Appeal held that the default notice issued by the mortgagee was indeed defective as it did not specify the nature of the default with sufficient particularity as required by the *National Credit Code*. However, the Court found that the mortgagee was not precluded from relying on a default not specified in the notice, provided that the default had in fact occurred. The Court further clarified that the "condition" referred to in the mortgage agreement was a condition precedent to the mortgagor retaining possession, not merely a contractual obligation. The Court also found that the evidentiary certificates provided by the mortgagee met the minimum requirements.

The appeal was dismissed, and the mortgagee was awarded costs.