• Chapter 2 Chapter 2 Mortgagee's powers and remedies

    • 56. Implied powers of mortgagees

      (1) A registered mortgagee of real property has the following powers on default by the mortgagor —
      (a) to sell the whole or part of the real property or any interest in the real property by whatever means the mortgagee, acting reasonably, determines appropriate, including by tender, public auction or by private contract;
      (b) to sever and sell fixtures apart from the balance of the real property;
      (c) to sell any easement, right or privilege of any kind over or in relation to the real property;
      (d) to enter into possession of the real property and receive the rents and profits from it, and, after obtaining possession, grant any easement, right or privilege of any kind over or in relation to the real property; and
      (e) to foreclose.
      (2) The powers may only be exercised in accordance with the provisions of this Chapter, but otherwise (and subject to subsection (3)) may be supplemented, varied or negated by express provision in the mortgage.
      (3) A mortgagee may not exercise a power under subsection (1) without first serving on the persons listed in subsection (4) a notice giving the mortgagor 30 days in which to remedy the default. If within that time the default is remedied, then the mortgagee may not exercise a power for that default.
      (4) The persons on whom the notice shall be served are —
      (a) the mortgagor;
      (b) any guarantor or surety of the mortgagor; and
      (c) any other registered mortgagee or chargee.

    • 57. Exercise of power of sale

      In exercising a power of sale, the mortgagee shall take reasonable care to obtain the market value for the real property at the time of the sale.

    • 58. Injunction to restrain power of sale

      (1) The mortgagor is entitled to seek an injunction to restrain the exercise of the power of sale.
      (2) The Court may make the order it determines appropriate, including (if it determines it appropriate) that the sale may be restrained, without the mortgagor having to offer to redeem the mortgage.

    • 59. Effect of transfer after sale by mortgagee

      (1) If a transfer in purported exercise of a power of sale by a registered mortgagee is lodged for registration, the Registrar need not enquire whether the power of sale was validly exercised.
      (2) On registration of the transfer, the mortgagor's interest vests in the transferee, free from —
      (a) any obligation to repay the debt secured by the mortgage; and
      (b) any other interest registered after it, except an interest to which the mortgagee has consented in writing, to which the mortgagee is a party, or which otherwise binds the mortgagee.
      (3) Registration of the transfer is not prevented by a caveat or covenant, if the caveat or covenant relates to an interest over which the mortgage has priority.

    • 60. Application of proceeds of sale

      (1) A mortgagee who has exercised a power of sale shall apply the money received from the sale —
      (a) to discharge any prior registered interests to which the sale is not made subject; or
      (b) by paying into Court a sum to satisfy the obligations under any prior registered interests.
      (2) Subject to subsection (1), the mortgagee holds the money on trust —
      (a) first, to pay all costs and expenses properly incurred in the sale or any attempted sale;
      (b) second, to discharge the principal, interest, costs, and any other money and liability secured by the mortgage in such order as may be provided in the mortgage or, if no such order is provided, as the mortgagee may determine in its sole discretion;
      (c) third, to pay later registered interests in the order of their priority; and
      (d) fourth, to pay any residue to the person who appears from the Register to be entitled to the mortgaged property or to be authorised to give receipts for the proceeds of its sale.

    • 61. Appointment of receiver

      (1) If a mortgage entitles the mortgagee to appoint a receiver, and the mortgagee appoints a receiver as described in subsection (3) below, the receiver —
      (a) may do anything in relation to the real property that the mortgagor could have done; and
      (b) may act as the mortgagor's agent.
      (2) However, if the receiver sells the real property, the receiver is subject to the same duties and responsibilities as if the mortgagee were the seller.
      (3) If a mortgage entitles the mortgagee to appoint a receiver, the receiver will be appointed by the Court upon application by the mortgagee and subject to any other requirements set forth in any other enactment.

    • 62. Foreclosure

      (1) On application by a registered mortgagee, the Court may make an order for foreclosure.
      (2) If the Court makes an order for foreclosure, the Registrar shall register the order if requested by a party to the proceedings or directed by the Court.
      (3) On registration of the order, the mortgagor's interest in the real property vests in the mortgagee, free from all liability under mortgages or other interests registered after the mortgage, except for leases and other interests that bind the mortgagee.