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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.
- Three '12