VYACHESELAV Kravchenko v The Rock Building Society

The plaintiff, Vyacheslav Kravchenko, sought to recover damages from The Rock Building Society following a sale of mortgaged property conducted by the defendant. The dispute centred on the adequacy of the sale process and whether the defendant exercised its power of sale in good faith, securing the best price consistent with its entitlement to the security. The matter was heard in the Supreme Court of Victoria.

The central legal issue was whether the defendant fulfilled its obligation to sell the property in good faith, ensuring the best price for the property. This involved an examination of whether the defendant sufficiently tested the market to ascertain the highest achievable price and whether the sale to a private buyer, an employee of the solicitor acting for the mortgagee, was conducted in good faith.

The court found that the defendant did not fully test the market, resulting in a sale price that was less than the best price available. The sale to a private buyer, who was also an employee of the solicitor acting for the mortgagee, was not conducted in good faith as it did not represent the best interests of the plaintiff. The court held that the defendant had breached its duty to sell the property in good faith and awarded damages to the plaintiff. The court's decision emphasised the importance of the mortgagee's duty to act in good faith and to secure the best price for the property when exercising the power of sale.