White & Anor v State Bank of New South Wales S278/2002

The parties to this matter were the White family (the appellants) and the State Bank of New South Wales (the respondent). The dispute concerned the respondent's alleged breach of duty in its role as a mortgagee in possession of the appellants' property. The matter came before Gaudron J in chambers.

The central legal issue before the court was whether the respondent, as mortgagee in possession, had acted in breach of its duty to take reasonable care to obtain a proper price for the mortgaged property when it sold the property. This duty arises from the mortgagee's obligation to act in good faith and with due diligence in exercising its power of sale.

Gaudron J considered the evidence presented regarding the sale process. The court's reasoning focused on whether the steps taken by the respondent were commercially reasonable in the circumstances to achieve the best price reasonably obtainable. The legal principle applied was that a mortgagee exercising its power of sale must act with a degree of care and diligence that a prudent owner would exercise if selling the property in their own interest, while also acting in good faith. The court examined the marketing, advertising, and negotiation strategies employed by the respondent to determine if they met this standard.

The court found that the respondent had not breached its duty. Consequently, the application by the appellants was dismissed.