Plaintiff v Defendant

1. This proceeding concerns the enforcement of the mortgage held by the plaintiff over the defendant's property located at 4 Chart Hills Place, Torquay VIC 3228 ('Property'). Judgment in default of appearance was entered on 27 March 2025 for possession of the Property (paragraph 1), and for the defendant to pay the plaintiff the sum of $1,509,509.02 plus interest and costs (paragraph 2).
2. The defendant applied to set the judgment aside. On 3 February 2026, the Court made an Order varying paragraph 2 of the judgment sum to the amount of $1,440,000 plus costs of $5,994.40, being a total of $1,445,994.40 ('Varied Judgment Sum'). The Court set aside $81,146.52 of the judgment on the basis that the defendant has shown that she has a prima facie defence in respect of the accrued interest, costs and expenses. The Court's reasons for this Order were published on 23 January 2026.[1] The judgment for possession was not set aside. Procedural orders were made for the defendant to have leave to enter an appearance and defence within 21 days of providing security for costs. Paragraph 6 of the 3 February 2026 order provided that in the event that the defendant does not pay security for costs within 30 days, the order varying the judgment and granting leave to file an appearance and defence is vacated.
3. By summons filed on 10 February 2026, the defendant sought to extend time for provision of security for costs for a further 30 days. At the hearing of that summons on 20 February 2026, the Court dismissed the summons and ordered that the defendant pay the plaintiff's costs for reasons given ex tempore.[2]
4. On 4 March 2026, the defendant provided security for costs by payment into court. On 26 March 2026, the defendant filed a notice of appearance and defence.
5. The plaintiff has taken steps to enforce its judgment for possession and the Varied Judgment Sum, and is seeking to exercise its power of sale in respect of the Property to recover the judgment in its favour.
6. By summons filed on 25 March 2026 ('Summons'), the defendant seeks the following orders:

(a) that, upon payment of the Varied Judgment Sum, the plaintiff discharge its first-ranking mortgage and make title available for another lender; and

(b) a stay on the sale of the Property or any further action prior to imminent refinance.

1. The Summons is listed for hearing on 15 April 2026. As referred to in the Order made on 26 March 2026, the defendant seeks that the Summons be determined on an urgent basis before 15 April 2026, or on the papers. For the reasons set out in that Order, the Court determined that, subject to any opposition from the plaintiff, it was appropriate for the Court to determine the Summons on the papers, and set a timetable for the exchange of materials, with liberty to apply to vary the Order. On 27 March 2026, the timetable was varied at the plaintiff's request.
2. In support of this application, the defendant relies upon her affidavits sworn on 19 March 2026 ('Gazzard 4'), 23 March 2026 ('Gazzard 5') and 7 April 2026 ('Gazzard 6'), and written submissions filed on 7 April 2026.
3. The plaintiff opposes the application and primarily relies upon the affidavit of its solicitor, Pip Nagam, filed on 1 April 2026 ('Nagam 2'), together with other evidence filed in this proceeding as noted below. The defendant also relies upon its written submissions filed on 1 April 2026.
4. By Order of Delany J made on 10 April 2026, the Summons was referred to be heard and determined by an Associate Judge.

B Should the Court require the plaintiff to discharge its first-ranking mortgage upon payment of the Varied Judgment Sum?

1. Paragraph 1 of the Summons seeks an order requiring the plaintiff to discharge its first-ranking mortgage and make the title to the Property available to another lender upon payment of the Varied Judgment Sum.
2. The defendant seeks this relief on the basis that she has obtained an offer to refinance the Property and wants the order to enable the refinance to proceed. The defendant says that she and her new lender are ready and willing to settle and that the plaintiff is impermissibly preventing the transaction because it is not accepting payment of the Varied Judgment Sum in exchange for discharge of the plaintiff's first registered mortgage. The defendant claims that in doing so, the plaintiff is fettering her equity of redemption, and that she is therefore entitled to the relief that she seeks.
3. I agree with the defendant's contention that as mortgagor of the Property, she holds an equity of redemption which subsists until completion of the sale. The 'equity of redemption' refers to the mortgagor's right to redeem or discharge the mortgage up to the point of foreclosure or exercise of the power of sale by paying to the mortgagee the full amount of the outstanding debt or performing the obligation for which security was given, even if the mortgagor is in default.[3]
4. The right of redemption has been described as an 'essential and inseparable attribute of a mortgage' which cannot be fettered upon payment of what is due to the mortgagee, including principal, interest and costs.[4] It arises from the fact that a mortgage is security for money and for the purpose of avoiding the unconscionability and injustice that would arise should the mortgagee receive through forfeiture more than the amount secured against the land, which would result in an impermissible penalty.[5]
5. In Latec Investments Ltd v Hotel Terrigal Pty Ltd ('Latec Investments'),[6] Kitto J explained that a mortgagor's equity of redemption is extinguished upon forfeiture and sale by the mortgagee, and that immediately prior to sale, the mortgagor has a right to have the mortgagee ordered to receive what should be found on a taking of accounts to be owing under the mortgage, and thereupon to execute a discharge of the mortgage.[7]
6. The defendant contends, without reference to authority, that in exercise of the equity of redemption:

(a) A mortgagor is required to pay 'the amount properly due' and is not required to pay amounts that are genuinely disputed and yet to be determined.[8]

(b) Where a Court has expressly separated enforceable and disputed amounts, the amount properly due must be understood as the amount 'presently enforceable'.[9]

1. The defendant submits that therefore the equity of redemption will be satisfied if she pays the Varied Judgment Sum to the plaintiff, and that this is sufficient to require the plaintiff to redeem its mortgage. The defendant submits that the plaintiff's refusal to accept this amount is fettering her equity of redemption inconsistently with the principles in Latec Investments and Commercial & General Acceptance Ltd v Nixon ('Commercial & General Acceptance').[10] She submits that it is inconsistent with the Court's Orders for the plaintiff to require receipt of the disputed amount along with the Varied Judgment Sum as a condition of redemption.
2. Commercial and General Acceptance concerns a mortgagee's duty to take reasonable care in exercising its power of sale, and its liability for loss caused as a consequence of breach of that duty. I do not understand the relevance of these principles to the relief sought by the defendant.
3. The key issue between the parties is whether the defendant's right of redemption arises upon payment of the Varied Judgment Sum to the plaintiff, or whether, as the plaintiff contends, the defendant only has a right to redeem upon payment of all amounts due to the plaintiff, included the disputed amount once the liability for that disputed amount has been determined.
4. For the following reasons, the defendant is not entitled to the relief that she seeks.
5. The defendant's argument is based upon the flawed premise that she is not required to pay any genuinely disputed amount in order to exercise her equity of redemption. No authority was provided to the Court which supported this position. As Latec Investments makes clear, the defendant's present right is for an order that the plaintiff 'receive what should be found on a taking of accounts to be owing under the mortgage and thereupon to execute a discharge of the mortgage'.[11] That is, the right to an order requiring the mortgagee to execute a discharge of mortgage only arises upon payment of all that is due and owing to the mortgagee, including principal, interest and costs. Here, there is an ongoing dispute in relation to a portion of the debt which the plaintiff claims from the defendant. In light of the ongoing dispute, the defendant's right to have the mortgage discharged will only arise once the full amount owing to the plaintiff has been determined and paid by the defendant. This will occur following the trial of this proceeding, if the parties do not reach agreement amongst themselves. Payment of the Varied Judgment Sum to the plaintiff does not give the defendant a right to have the plaintiff's mortgage discharged.
6. If the defendant's contention that the equity of redemption arises upon payment of only the undisputed portion of the debt were correct, the mortgagee would be left with no security in respect of the amounts which it claims from the defendant. This would give rise to an injustice and prejudice to the plaintiff, as it would no longer have security for the amount that it says it is owed under the relevant facility agreements.
7. I therefore do not accept that the plaintiff is fettering or clogging the defendant's equity of redemption by refusing to discharge its mortgage upon payment of the Varied Judgment Sum. I also do not accept that the plaintiff's failure to accept the defendant's offer to settle the proceeding through payment of the Varied Judgment Sum only is acting contrary to the Court's Orders. The plaintiff is entitled to maintain its security until the defendant's liability for the disputed sum is resolved.
8. For these reasons, the defendant is not entitled to the relief that she seeks in paragraph 1 of the Summons.

C Should the Court grant a stay of execution?

1. In paragraph 2 of the Summons, the defendant seeks a stay of the sale of the Property pending refinance. That is, she is seeking a stay of execution of the possession order and Varied Judgment Sum. The Court has the power to stay execution of a judgment pursuant to its inherent jurisdiction and pursuant to r 66.16 of the Supreme Court (General Civil Procedure) Rules 2025 (Vic).
2. The starting point in relation to the Court's discretion is that a party who obtains a judgment is entitled to have it enforced without delay. The circumstances justifying a stay are those which go to the enforcement of the judgment and not to its validity or correctness. In exercising the jurisdiction to stay execution, the Court is required to take into account all the circumstances of the case and is not bound by decisions on other sets of facts.[12]
3. As I understand it, the defendant seeks the stay on the basis that she is ready to refinance the Property, which would allow repayment of the Varied Judgment Sum. To evidence the impending refinance, the defendant relies upon the following documents:

(a) A document entitled Formal Loan Approval dated 11 March 2026 addressed to Gazzard & Co Pty Ltd, which states that Accelerated Loans Pty Ltd is prepared to finance on the basis of the enclosed formal loan approval.[13] This document appears to be incomplete, however it does state that the gross loan amount is $1,520,000 at 13% per annum interest for the purpose of working capital for a loan term of 3 months, with the net amount of $1,448,220 to be provided to the borrower. It also states that the lender will take a first priority mortgage over the Property, and a second priority mortgage over a property located at Norlane, Victoria.[14]

(b) A letter dated 23 March 2026 from the solicitors acting for Accelerated Loans Pty Ltd regarding a loan to the borrower 'Gazzard & Co Pty Ltd', of which the defendant is the guarantor and the mortgaged properties are the Property and the Norlane property.[15] The letter states that it encloses for review and execution the loan documents, including a mortgage, facility document, facility terms and conditions, drawdown notice, borrower ancillary documents, guarantor ancillary documents and lender checklist. The defendant does not exhibit these documents to her affidavit as they are lengthy.[16]

(c) An email from Michael Helper, Commercial and Development Finance Broker of Alliance Financial Group dated 7 April 2025, which states: 'As discussed, this loan with the lender accelerated loans has been unconditionally approved and loan docs have been issued. The signing and execution of the loan docs is the final step prior to settlement which will happen within 24-48 hours after the loan docs have been signed.'[17]

1. Given that I have refused the relief sought in paragraph 1 of the Summons, it is unclear whether the refinance may proceed. This is because the letter of offer makes clear that the refinance is conditional upon the new lender obtaining a first-ranking mortgage over the Property. For the reasons outlined in Part B, the defendant is not entitled to an order requiring the plaintiff to discharge its mortgage. Therefore, a stay to allow the defendant to refinance the Varied Judgment Sum only cannot be justified on the materials before me. There is no evidence of an unconditional offer for refinance which addresses the Varied Judgment Sum along with the disputed sum.
2. Further and in any event, the following circumstances weigh against the exercise of the Court's discretion to stay execution:

(a) The defendant has been in default of the plaintiff's facility since 2024,[18] with the last two payments made to the plaintiff on 26 June 2025 and 31 October 2024.[19] The defendant has given inconsistent evidence as to her financial position.[20] There is no evidence which suggests that a stay will change the defendant's circumstances and allow the plaintiff's debt to be paid and the plaintiff's position in relation to the disputed sum secured.

(b) The quantum of the disputed sum increases having regard to accrued interest and costs. As at 1 April 2026, the disputed sum was $239,447.26 plus costs.[21] The evidence suggests that the value of the Property has declined to $1.7 million.[22] Further delay may cause prejudice to the plaintiff if its security position declines. It also benefits the defendant through limiting the ongoing accrual of interest on the Varied Judgment Sum, should it be satisfied via a sale of the Property.

1. The plaintiff is entitled to enforce its order for possession and payment of the Varied Judgment Sum, and is entitled to do so without delay. The plaintiff accepts that it is only presently entitled to the Varied Judgment Sum, and that to the extent that the sale of the Property produces a surplus, that it is not entitled to that surplus until its entitlement to the disputed sum has been determined. In the circumstances, it would be appropriate for any surplus to be paid into court pending the outcome of this proceeding.
2. I accept that the defendant's equity of redemption will be extinguished upon sale of the Property in execution of the judgment sum. However, the defendant's equity of redemption does not give her a right to delay the sale of the Property, so that in the future she might exercise that right.[23] Here there is insufficient evidence of the means by which the defendant might pay all amounts owing to the plaintiff, including the disputed sum, which would need to be quarantined by payment into court pending the outcome of this proceeding. Given the Varied Judgment Sum outstanding, and the circumstances outlined above, there is nothing unconscionable in allowing the plaintiff to enforce its entitlement to possession of the Property and payment of the Varied Judgment Sum.
3. I therefore refuse the defendant's application for a stay of execution.

1. I will therefore make orders dismissing the Summons.
2. The plaintiff seeks an order for indemnity costs on the grounds that the defendant was repeatedly told of the effect of the 3 February Order and Varied Judgment Sum; that she has failed or refused to answer the plaintiff's repeated invitations to provide evidence of an unconditional offer of refinance; and that she failed to file a defence by the time ordered by the Court, without explanation. The plaintiff relies upon Nagam 2, which addresses the chronology of her correspondence and telephone calls with the defendant and her partner.
3. I am not satisfied that the defendant's conduct warrants an order for indemnity costs. While she has not been successful and she was warned that this outcome was likely, having regard to her position as a self-represented litigant, I am not satisfied that her prosecution of the Summons was done in wilful disregard of known facts or law or that she has otherwise engaged in conduct which would justify an indemnity costs order.
4. It is appropriate that costs follow the event, and I will order that the defendant pay the plaintiff's costs of and incidental to the Summons, to be taxed on the standard basis in default of agreement.

[1] Orde Mortgage Custodian Pty Ltd v Gazzard [2026] VSC 7 ('Orde v Gazzard').

[2] Ex tempore rulings delivered in this proceeding on 20 February 2026, 16-19, 36-40 ('20 February Ruling').

[3] Sun North Investments Pty Ltd v Dale [2013] QSC 44; (2014) 1 Qd R 369, 382 [74]-[75].

[4] Ibid 383 [76], quoting Coote's Law of Mortgages (8th ed), 11-12.

[6] [1965] HCA 17; (1965) 113 CLR 265.

[7] Ibid 274-275 (Kitto J, Taylor and Menzies JJ agreeing).

[8] Defendant's Written Submissions filed on 7 April 2026, [10].

[10] [1981] HCA 70; (1981) 152 CLR 491.

[12] Sami v Roads Corporation [2009] VSCA 44, [24]-[25] (Williams AJA, Redlich JA agreeing).

[13] Exhibit VG-0 to Gazzard 4, 7-10 (Loan Approval Letter).

[15] Exhibit VG-14 to Gazzard 6, 3 (23 March Letter).

[17] Exhibit VG-18 to Gazzard 6, 6 (7 April Email).

[23] Six Bruce Pty Ltd v Jadig Finance Pty Ltd [2018] VSC 552, [14].