Stone v Farrow Mortgage Services (in liq)

The appeal concerned a dispute between the mortgagor, Stone, and the mortgagee in possession, Farrow Mortgage Services (in liq). Stone sought damages from Farrow, alleging a breach of duty in the exercise of its power of sale under a mortgage. The matter was heard by the Court of Appeal of New South Wales.

The primary legal issue before the Court of Appeal was whether Farrow had breached its duty to Stone in exercising its power of sale. Specifically, the court had to determine if Farrow had acted improperly or negligently in conducting the sale of the mortgaged property, thereby causing loss to Stone.

The Court of Appeal found no evidence to support Stone's claim of a breach of duty. The judges were not satisfied that Farrow had failed to take reasonable steps to obtain a proper price for the property or that its conduct amounted to a breach of its obligations to the mortgagor. The court applied the established legal principles regarding the duties of a mortgagee exercising a power of sale, which require the mortgagee to act in good faith and with reasonable care to obtain a proper price.

The appeal was dismissed, and Stone was ordered to pay Farrow's costs.