Permanent Trustee Australia Limited & Anor v Andreas Kolozos & Anor & Arthur Krallis & Anor [2005] NSWSC 420

Permanent Trustee Australia Limited & Anor v Andreas Kolozos & Anor & Arthur Krallis & Anor [2005] NSWSC 420

The plaintiffs were under a statutory obligation imposed by s58 of the Real Property Act (1900) to distribute any surplus from the Cronulla sale to the second mortgagees before any balance could go to the mortgagor. Compliance with that statutory obligation could not constitute a breach of an equitable duty of good faith to third party mortgagors, nor could it be characterised as unconscionable conduct under the ASIC Act. The defendants' cross-claim therefore had no foundation and failed.

Jurisdiction
Australia
Judgment Date
02 May 2005
Procedural Posture
Actions for Possession of Land With Defendants' Cross Claim / Judgment on the Defendants' Cross Claim; Possession Orders Not Made Because the Mortgages Over the Kingsgrove and Canada Bay Properties Had Been Discharged
Outcome
Judgment for the plaintiffs (cross-defendants) on the defendants' (cross-claimants') claim.
Legal Topics
['possession of Land' "mortgagee's Power of Sale" 'distribution of Surplus Sale Proceeds' 'third Party Mortgagors' 'equitable Duty to Act in Good Faith' 'unconscionable Conduct']
['property Law' 'equity' 'financial Services Law'] ['possession of Land' "mortgagee's Power of Sale" 'distribution of Surplus Sale Proceeds' 'third Party Mortgagors' 'equitable Duty to Act in Good Faith' 'unconscionable Conduct']

Case Brief

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Procedural Posture

Actions for Possession of Land With Defendants' Cross Claim / Judgment on the Defendants' Cross Claim; Possession Orders Not Made Because the Mortgages Over the Kingsgrove and Canada Bay Properties Had Been Discharged

Legal Issues

  1. 1 ["Whether surplus funds from the mortgagee sale of the Cronulla properties should be paid to the second mortgagees or applied pro tanto to reduce the defendants' indebtedness under mortgages over other properties." "Whether the plaintiffs' proposed distribution of sale proceeds breached an equitable duty as mortgagees to act in good faith towards third party mortgagors." "Whether the plaintiffs' proposed distribution of sale proceeds was unconscionable conduct under ss12CA and 12CC of the Australian Securities & Investments Commission Act (2001) (Cth)."]

Ratio Decidendi

The plaintiffs were under a statutory obligation imposed by s58 of the Real Property Act (1900) to distribute any surplus from the Cronulla sale to the second mortgagees before any balance could go to the mortgagor. Compliance with that statutory obligation could not constitute a breach of an equitable duty of good faith to third party mortgagors, nor could it be characterised as unconscionable conduct under the ASIC Act. The defendants' cross-claim therefore had no foundation and failed.

Court Disposition

Judgment for the plaintiffs (cross-defendants) on the defendants' (cross-claimants') claim.

Orders

  • ["Judgment for the plaintiffs (cross-defendants) on the defendants' (cross-claimants') claim." "The defendants are to pay the plaintiffs' costs."]