Golden J Wealth Pty Ltd v AC Holdings Co Pty Limited [2019] NSWSC 1342

Golden J Wealth Pty Ltd v AC Holdings Co Pty Limited [2019] NSWSC 1342

The freezing orders severely restricted AC Holdings Co Pty Limited's ability to deal with its assets and the Land, and Golden J Wealth Pty Ltd genuinely and in good faith formed the opinion by 21 December 2018 that AC Holdings Co Pty Limited had suffered a material degradation in its ability to comply with the mortgages. The clause did not require that opinion to be reasonable or objectively available, but in any event it was. Golden J Wealth Pty Ltd committed no wrong by bringing the proceedings and the evidence did not establish that the proceedings caused AC Holdings Co Pty Limited's inability to pay the 17 May 2019 interest instalment. The Higher Rate interest provision, under which a...

Jurisdiction
Australia
Judgment Date
04 October 2019
Procedural Posture
Equity Commercial List Mortgage Possession Proceedings and Cross Claim / Principal Judgment Determining Cross Claim After Orders for Possession Had Been Made
Outcome
Cross-claim dismissed.
Legal Topics
['construction of Mortgage Default Clause' 'mortgagee Opinion of Material Degradation' 'good Faith' 'failure to Pay Interest' 'taking Advantage of Own Wrong' 'penalty Doctrine' 'higher and Lower Interest Rates' 'freezing Orders']
['contract' 'equity' 'real Property' 'mortgages'] ['construction of Mortgage Default Clause' 'mortgagee Opinion of Material Degradation' 'good Faith' 'failure to Pay Interest' 'taking Advantage of Own Wrong' 'penalty Doctrine' 'higher and Lower Interest Rates' 'freezing Orders']

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Procedural Posture

Equity Commercial List Mortgage Possession Proceedings and Cross Claim / Principal Judgment Determining Cross Claim After Orders for Possession Had Been Made

Legal Issues

  1. 1 ['Whether, as at 21 December 2018, an Event of Default had occurred because Golden J Wealth Pty Ltd held the opinion that AC Holdings Co Pty Limited had suffered a material degradation in its ability to comply with the mortgages.' "Whether Golden J Wealth Pty Ltd was precluded from relying on AC Holdings Co Pty Limited's failure to pay interest on 17 May 2019 as an Event of Default because doing so would involve taking advantage of its own wrong." 'Whether the obligation to pay interest at the Higher Rate was an unenforceable penalty.']

Ratio Decidendi

The freezing orders severely restricted AC Holdings Co Pty Limited's ability to deal with its assets and the Land, and Golden J Wealth Pty Ltd genuinely and in good faith formed the opinion by 21 December 2018 that AC Holdings Co Pty Limited had suffered a material degradation in its ability to comply with the mortgages. The clause did not require that opinion to be reasonable or objectively available, but in any event it was. Golden J Wealth Pty Ltd committed no wrong by bringing the proceedings and the evidence did not establish that the proceedings caused AC Holdings Co Pty Limited's inability to pay the 17 May 2019 interest instalment. The Higher Rate interest provision, under which a...

Court Disposition

Cross-claim dismissed.

Orders

  • ['Orders for possession of the Land in favour of Golden J Wealth Pty Ltd were made on 20 September 2019.' 'The cross-claim is dismissed.' 'The defendant/cross-claimant is provisionally ordered to pay the costs of the proceedings of the plaintiff/cross-defendant, to solidify after seven days unless either party...