Southwell v Roberts [1940] HCA 23

Southwell v Roberts [1940] HCA 23

Given the disproportionate expenditure and the substantial alteration in the nature of the property, a mortgagee in possession could not add the cost of demolishing old buildings and erecting new ones to the redemption account, absent the mortgagor's consent or acquiescence.

Parties
Appellant (defendant, Mortgagee): Ruby Sarah Southwell; Respondent (plaintiff, Mortgagor): William Lester Roberts; Defendant (second Mortgagee): William Joseph Hanly
Jurisdiction
Australia
Procedural Posture
Appeal (redemption Suit) / High Court of Australia, on Appeal From Supreme Court of New South Wales
Outcome
Appeal dismissed with costs (subject to a minor variation by consent regarding net rents and profits).
Legal Topics
Mortgages, Mortgagee in Possession, Redemption, Improvements by Mortgagee, Allowances for Improvements, Equitable Accounting
Property Law Equity Mortgages Mortgagee in Possession Redemption Improvements by Mortgagee Allowances for Improvements Equitable Accounting

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Parties

Ruby Sarah Southwell

Appellant (defendant, Mortgagee)

William Lester Roberts

Respondent (plaintiff, Mortgagor)

William Joseph Hanly

Defendant (second Mortgagee)

Procedural Posture

Appeal (redemption Suit) / High Court of Australia, on Appeal From Supreme Court of New South Wales

Legal Issues

  1. 1 Whether a mortgagee in possession may add to the mortgage debt the cost of demolishing old buildings and erecting new permanent improvements without the mortgagor's consent
  2. 2 Whether such expenditure should be allowed in taking the redemption account

Ratio Decidendi

Given the disproportionate expenditure and the substantial alteration in the nature of the property, a mortgagee in possession could not add the cost of demolishing old buildings and erecting new ones to the redemption account, absent the mortgagor's consent or acquiescence.

Court Disposition

Appeal dismissed with costs (subject to a minor variation by consent regarding net rents and profits).

Orders

  • Variation of decree: insertion of 'net' before 'rents and profits' in the direction for account; otherwise, decree as per trial court stands.
  • Costs awarded against the appellant.