Salloway Pty Ltd v Barlow [2019] NSWSC 1234

Salloway Pty Ltd v Barlow [2019] NSWSC 1234

Clause Sixthly of the mortgage, read with clause Firstly and in the commercial context of the sale of the contaminated land, meant that if the EPA satisfaction notice was not received by the first plaintiff within 12 months of the date of the mortgage the $250,000 loan was immediately forgiven and the defendant was obliged to provide a discharge of mortgage. The clause was not penal because it was an integral part of the parties' negotiated arrangement for determining the consideration payable for the land and was not extravagant, unconscionable or out of all proportion to the interests protected. Relief against forfeiture was refused because clause Sixthly was not primarily security for...

Jurisdiction
Australia
Judgment Date
19 September 2019
Procedural Posture
Equity Proceedings Concerning a Mortgage, Discharge of Mortgage, Specific Performance, Penalties and Relief Against Forfeiture / Principal Judgment After Hearing of the Plaintiffs' Summons and Defendant's Cross Summons
Outcome
Declaration and specific performance granted for the plaintiffs; defendant's Cross-Claim dismissed; defendant ordered to pay the plaintiffs' costs.
Legal Topics
['mortgages' 'construction of Commercial Agreements' 'time Stipulations' 'specific Performance' 'penalty Doctrine' 'relief Against Forfeiture' 'clean Up Notice' 'vendor Finance']
['land Law' 'equity' 'contract Law'] ['mortgages' 'construction of Commercial Agreements' 'time Stipulations' 'specific Performance' 'penalty Doctrine' 'relief Against Forfeiture' 'clean Up Notice' 'vendor Finance']

Case Brief

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Procedural Posture

Equity Proceedings Concerning a Mortgage, Discharge of Mortgage, Specific Performance, Penalties and Relief Against Forfeiture / Principal Judgment After Hearing of the Plaintiffs' Summons and Defendant's Cross Summons

Legal Issues

  1. 1 ['Whether, on the true construction of the mortgage, failure to receive an EPA satisfaction notice within 12 months of the date of the mortgage meant that the $250,000 loan was forgiven and the defendant was obliged to provide a discharge of mortgage.' 'Whether the 12 month time period in clause Sixthly of the mortgage was essential or otherwise operated as a strict condition for forgiveness of the loan.' 'Whether the EPA letter dated 28 November 2014 met the requirements for an EPA satisfaction notice under clause Firstly of the mortgage.' 'Whether clause Sixthly was unenforceable as a penalty.' 'Whether the defendant should be granted relief against forfeiture from the consequences of clause Sixthly.']

Ratio Decidendi

Clause Sixthly of the mortgage, read with clause Firstly and in the commercial context of the sale of the contaminated land, meant that if the EPA satisfaction notice was not received by the first plaintiff within 12 months of the date of the mortgage the $250,000 loan was immediately forgiven and the defendant was obliged to provide a discharge of mortgage. The clause was not penal because it was an integral part of the parties' negotiated arrangement for determining the consideration payable for the land and was not extravagant, unconscionable or out of all proportion to the interests protected. Relief against forfeiture was refused because clause Sixthly was not primarily security for...

Court Disposition

Declaration and specific performance granted for the plaintiffs; defendant's Cross-Claim dismissed; defendant ordered to pay the plaintiffs' costs.

Orders

  • ['Declaration that, upon the true construction of the mortgage between the first plaintiff and the defendant and in the events that happened, the mortgage loan has been forgiven pursuant to clause Sixthly.' 'Orders in the nature of specific performance compelling the defendant to perform her obligations under clause...