Para Factors Pty Limited v Sabah Saman & Ors [2001] NSWSC 1175

Para Factors Pty Limited v Sabah Saman & Ors [2001] NSWSC 1175

The Court accepted Mr Walker's evidence and rejected the defendants' version, finding that the true agreement was that the defendants' mortgage would secure $90,000 of Paleena Holdings Pty Limited's indebtedness to the plaintiff and would become enforceable when the plaintiff instructed that it be dated, stamped and registered. The impugned clauses did not reflect that agreement and were inserted under mutual mistake. The plaintiff's solicitors' letter of 16 August 2001 activated the covenant; non-payment after two months entitled the plaintiff to judgment for $90,000 plus interest.

Jurisdiction
Australia
Judgment Date
20 December 2001
Procedural Posture
Equity Division Civil Proceeding for Rectification and Enforcement of a Mortgage, With Cross Claim / Final Judgment After Hearing
Outcome
Mortgage rectified; verdict for the plaintiff against both defendants; cross-claim dismissed; defendants ordered to pay the plaintiff's costs of the claim and cross-claim.
Legal Topics
['rectification of Mortgage' 'enforcement of Mortgage Covenant' 'mutual Mistake' 'security for Company Indebtedness' 'jones V Dunkel Inference' 'caveat Over Property']
['equity' 'contract Law' 'property Law' 'evidence'] ['rectification of Mortgage' 'enforcement of Mortgage Covenant' 'mutual Mistake' 'security for Company Indebtedness' 'jones V Dunkel Inference' 'caveat Over Property']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Equity Division Civil Proceeding for Rectification and Enforcement of a Mortgage, With Cross Claim / Final Judgment After Hearing

Legal Issues

  1. 1 ["Whether the mortgage executed on 31 January 1997 was intended to secure $90,000 of Paleena Holdings Pty Limited's indebtedness to the plaintiff or instead to secure a proposed $90,000 advance to Kathy Saman for restaurant renovations." 'Whether the mortgage should be rectified because its terms did not embody the oral agreement between the parties.' 'Whether and when the plaintiff gave instructions sufficient to make the rectified mortgage enforceable.' "Whether the defendants' cross-claim concerning the caveat should be dismissed."]

Ratio Decidendi

The Court accepted Mr Walker's evidence and rejected the defendants' version, finding that the true agreement was that the defendants' mortgage would secure $90,000 of Paleena Holdings Pty Limited's indebtedness to the plaintiff and would become enforceable when the plaintiff instructed that it be dated, stamped and registered. The impugned clauses did not reflect that agreement and were inserted under mutual mistake. The plaintiff's solicitors' letter of 16 August 2001 activated the covenant; non-payment after two months entitled the plaintiff to judgment for $90,000 plus interest.

Court Disposition

Mortgage rectified; verdict for the plaintiff against both defendants; cross-claim dismissed; defendants ordered to pay the plaintiff's costs of the claim and cross-claim.

Orders

  • ['The mortgage executed by the parties on 31 January 1997 be rectified by deleting paragraph (b) of Annexure A and substituting: "(b) The Mortgagor will pay to the Mortgagee the principal sum of Ninety Thousand Dollars ($90,000), or so much thereof as shall remain unpaid, on the day being two (2) months from the...