Sood v Christianos

In the matter of Sood v Christianos, the dispute centred on the interpretation and exercise of powers of sale under various mortgage agreements. The case was heard in the Supreme Court of New South Wales. The primary issue before the court was whether the memorandum of loan provided a contractual power of sale, and if so, whether the mortgagee should register the mortgage and exercise the power of sale under the Real Property Act 1900, section 58, rather than seeking a judicial sale. Additionally, the court examined whether the equitable mortgage contained an implied power of sale, and if so, whether the sale should be conducted by auction given the circumstances.

The court found that the memorandum of loan indeed granted a contractual power of sale to the mortgagee. The court held that the equitable mortgage did not contain an implied power of sale, as it was subject to a registered first mortgage, two unregistered mortgages, and an unregistered charge. The mortgagee's failure to register the mortgage did not negate the contractual power of sale but did affect the remedy available to the mortgagee. The court also considered whether a judicial sale was the standard remedy for an equitable charge or a remedy of last resort. It concluded that the mortgagee should have registered the mortgage and exercised the power of sale under the Real Property Act 1900, section 58, instead of seeking a judicial sale.

Regarding the manner of sale, the court found that in the circumstances where the second mortgagee was in possession of a draft contract of sale with a purchase price sufficient to discharge the first mortgage in full and the second mortgage partially, the sale should be conducted by auction. The court emphasised the need to consider factors relevant to value and determined that the mortgagee should conduct the sale to maximise the property's value. The court ordered that the mortgagee register the mortgage and exercise the power of sale pursuant to the Real Property Act 1900, section 58, and conduct the sale by auction, considering all relevant factors to achieve the best possible value for the property.