The bank was accordingly found to be in breach of its

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Unformatted text preview: egard of, or with reckless indifference to, his interests when it contracted to sell at a gross undervalue. ISSUE: What constitutes reasonably adequate steps to get a fair price? DECISION: The NSW Supreme Court held that a fair market value of the land was $14 000 to $15 000. The court also held that mere errors of judgment don’t constitute a breach of a mortgagee’s duty to the mortgagor. However, a failure to take reasonably adequate steps to ensure a fair price will constitute a breach of that duty. The bank was accordingly found to be in breach of its duty. COMMENT: The mortgagee has a duty to take reasonable care to ensure that the property is sold at market value. The mortgagee’s duty to the mortgagor may also arise where the property is sold to an associate of the mortgagee. A mortgagee who wishes to acquire the mortgaged property must demonstrate steps taken to protect the interests of the borrower. 873 CHAPTER 33 REVIEW QUESTIONS 33.10 What is the difference between ‘foreclosure’ and ‘the power of sale...
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This document was uploaded on 04/23/2012.

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