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Unformatted text preview: se of subsequent encumbrances. The question is whether the mortgagee must merely act in good faith or whether they are bound to take reasonable care to obtain a better price.
In Queensland, the Property Law Act 1974 states that the mortgagee has a duty to take reasonable
care to ensure that the property is sold at market value. In Commercial and General Acceptance Ltd v
Nixon (1981) 38 ALR 225, the High Court considered the application of the Queensland legislation and
the power of sale generally. Aickin J said:
The power of sale is an essential part of the mortgagee’s security but it is not to be exercised exclusively in his own interest without regard to the interests of the mortgagor by directing attention exclusively to the recovery of the mortgage debt, interest and expenses rather than obtaining the market
value of the property at the time of sale. (Reproduced with permission from LexisNexis Australia.)
The mortgagee must advertise the proposed sale adequately so that the property and its potential...
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This document was uploaded on 04/23/2012.
- Three '12