Mt Duneed possesses and has validly exercised the power of sale under s 77 of the TLA
207 I have formed the view that Mt Duneed would have been entitled to the relief that it sought on the present iteration of its cross claim, substantially on the basis that it submits, and that the submissions of Runner and Jasper to the contrary should be rejected.
208 The starting point is to record that, as Mt Duneed submits, the First Mortgage is a pledge for repayment only, and that upon repayment in full (as Mt Duneed has proposed), a mortgagee must discharge as a matter of law. There is nothing in the terms of ss 76 and 77 of the TLA to suggest that a subsequent mortgagee must defer to the first mortgagee in the exercise of the power of sale in the event of default in payment of the principal sums secured by the mortgages, and no reason of principle why this should be so.
209 Whatever may be the correct view about the effect of Manser v Dix insofar as the rights of a puisne mortgagee to exercise a power of sale without the consent of superior mortgagees is concerned, and whether payment from the proceeds of sale is equivalent to the tender of the moneys secured by a higher ranked mortgagee, the modern position as it applies to the circumstances of this case was stated succinctly and in my respectful view correctly by the Privy Council in Kaolim Private v United Overseas Land Ltd [1983] 1 WLR 472 at 476 (Lord Diplock, Lord Keith of Kinkel, Lord Roskill, Lord Brightman and Sir John Megaw).
210 Kaolim was an appeal from the Court of Appeal of the Republic of Singapore. A mortgagor had purchased property and had then mortgaged that property to a bank as a security for its loan. By the time the bank (as mortgagee) wished to sell the property, a statutory property taxation debt had accrued to the Comptroller of Taxation. The debt was deemed, according to the relevant Singaporean legislation, to be "the first charge on the property concerned".
211 In analysing the relationship between the bank and the Comptroller, Lord Brightman, delivering the unanimous advice of the Board, equated the position of the bank with the position of a second mortgagee. His Lordship said as follows at 476:
At the time of the offer for sale by the bank, there was in existence a prior charge to secure the arrears of property tax. Therefore, when the bank came to sell, it was in substance selling as second mortgagee.
212 Lord Brightman then analysed the rights of a second mortgagee (vis-à-vis a first mortgagee) when exercising its power of sale. The opinion of the Board is in broad terms and of general applicability (that is to say, applicable to generally-worded powers of sale as they exist in statute or in contract; as well as to broad powers of sale exercised on an equitable basis). His Lordship said also at 476:
The right of a second mortgagee is to sell the mortgaged property, which subject to incumbrances is the mortgagor's property, at the best price reasonably obtainable. The second mortgagee so selling has a choice. He can sell the mortgaged property free from the first charge. In this case the purchase price will reflect the full value of the unencumbered land. When therefore the purchaser pays the purchase money to the second mortgagee, the second mortgagee must discharge the first charge so that the purchaser is granted what the vendor has contracted to convey, namely an unencumbered estate. Normally the first mortgage will be discharged in advance of the receipt of the purchase money, or out of the purchase money before the net amount is paid to the mortgagor [if there is such a net amount]. Alternatively, the second mortgagee can sell the property subject to the first mortgage. In this case the purchase price will reflect only the value of the equity of redemption. When therefore the purchaser pays the purchase money to the second mortgagee, the second mortgagee will pay off his own debt and hand the entire balance to the mortgagor. The purchaser cannot require the second mortgagee or the mortgagor to pay to him the sum needed to discharge the first charge. Otherwise the purchaser will be granted more than he has contracted to buy which is only an unencumbered estate.
(Emphasis added.)
213 The Board's view makes it plain that equitable principle will uphold a subsequent mortgagee's right to sell the mortgaged property and discharge the prior incumbrance, thereby making its own subsequent claim beneficial or available. Runner is obliged to accept repayment and the discharge of its mortgage on this basis, and its submission that the relevant equitable or general law principles do not assist Mt Duneed should be rejected. Such a result is plainly just, and accords with commercial common sense.
214 Further, Runner's submission that Mt Duneed requires its concurrence to sell, even in circumstances where Runner's entire debt will be repaid, is not correct. As Mt Duneed submits, Runner has a duty to protect Mt Duneed's financial interest in the property: Downsview Nominees at 317; Jacobson at 3. Runner cannot sit on its mortgage and take no action to enforce it and at the same time prevent Mt Duneed from enforcing its mortgage. I accept Mt Duneed's submission that none of the cases cited by Runner in support of its right to exercise its power of sale as it wishes can have any application in circumstances where its stated reason for refusing to exercise that power is to enhance its ability to earn interest at Mt Duneed's expense in breach of its equitable duty to protect Mt Duneed's interest in the Land as second mortgagee. Indeed, it is noteworthy that, as Mt Duneed submits, none of the authorities referred to by Runner in support of its submission that it is entitled to sell at a time convenient to itself concerns a mortgagee acting to prevent the sale of mortgaged property where it would be repaid in full.
215 However, Mt Duneed's contention that the decision of the English Court of Appeal in Palk ordering a sale and depriving a mortgagee of its security where it is just to do so supports its position requires more careful consideration. In Palk, Mr Palk had obtained a loan from a bank (the first mortgagee). Security for that loan was a house owned by Mr Palk and his wife, subject to a deed of mortgage. Arrears began to accrue under the mortgage and Mr Palk decided that he wished to sell the house. He found a purchaser who was prepared to buy at a price which was some £77,000 less than the amount required to discharge, in full, the debt owed to the first mortgagee.
216 Mr and Mrs Palk sought to have the court exercise its discretion under s 91(2) of the LPA to order the sale. Section 91(2) is to the effect that the court may, on the request of any person interested either in the mortgage money or the right of redemption, direct a sale of the mortgaged property on the terms the court sees fit. The house was subject to two further puisne mortgages, but those mortgagees agreed to the course urged by the Palks.
217 In the interim, the first mortgagee had obtained an order for possession of the property (stayed until the Palks' proceeding was determined) and wished to rent it out for a period of time and then to sell it when the market improved. This course was of little assistance to the Palks as the rental income would most likely have been outstripped by the compounding interest on the mortgage.
218 The primary judge dismissed the Palks' application on the basis that the court may only order a sale (against the wishes of the mortgagee) where the property is to be sold for an amount which fully discharges the debt to the mortgagee (or if security is provided for any shortfall). Mr Palk was bankrupted in the process and Mrs Palk appealed.
219 The Court of Appeal allowed the appeal and ordered a sale pursuant to s 91(2) of the LPA. Sir Donald Nicholls V-C (with whom Butler-Sloss LJ and Sir Michael Kerr agreed) concluded that the discretion in s 91(2) "is not hedged about with preconditions" and that "this is a case in which a sale should be directed even though there will be a deficiency [in terms of purchase price meeting the debt and that it is] just and equitable to order a sale because otherwise unfairness and injustice will follow" (at 422). Four factors contributed to this conclusion as to injustice, namely: (i) the income shortfall between any rental income and the compounding of interest under the mortgage; (ii) that the only hope of recoupment of that shortfall lay in the chance of a significant rise in house prices; (iii) that the likelihood of Mrs Palk suffering seriously increased loss made the bank's plan oppressive to her; and (iv) that directing a sale would not prevent the bank from speculating on the housing market - the bank could buy the house and then determine whether to sell it immediately, or to wait for an increase in value.
220 Relying on the similarity between Runner's plan (which involves not exercising its power of sale and allowing the capitalisation of the interest under the first mortgage to diminish Mt Duneed's equity in the Land under the second mortgage), the fact that the sale of the Land will lead to repayment of Runner in full, and that the court in Palk was prepared to exercise its discretion to order a sale even when that sale would not lead to full repayment of the first mortgagee, Mt Duneed submits that it is not precluded from exercising its power of sale under s 77(1).
221 There is, however, some doubt as to the correctness of Palk. In Cheltenham and Gloucester plc v Krausz [1997] 1 WLR 1558, a mortgagee sought to enter into possession after the mortgagor fell into arrears and a warrant was issued to that effect. In the interim, the mortgagor purported to sell the property to a charitable trust for an amount which was well below the value of the debt to the mortgagee, and the mortgagor sought an order of the court pursuant to s 91(2) of the LPA that the property be sold to the trust. The primary judge granted the order for sale. On appeal to the Court of Appeal, Phillips LJ (with whom Millett and Buter-Sloss LJJ agreed) observed that the court's conclusion in Palk that the limits of the s 91(2) discretion permitted the court to order the sale of property by a mortgagor (against the wishes of the mortgagee) where the sale would not fully discharge the debt to the mortgagee (and also where the mortgagor proffered no security to account for the shortfall) was subject to serious doubt (see at 1567). Accordingly, the court allowed the mortgagee's appeal.
222 Whatever be the correct position, it may fairly be said that Palk and Krausz do, nonetheless, support the argument made by Mt Duneed that it should be able to exercise its power of sale under s 77(1) without the need first to tender the funds necessary to discharge the debt to Runner (which, instead, may be tendered from the proceeds of sale). Palk and Krausz both accepted that the long-standing practice of courts of equity is to exercise the discretion to order the sale of property subject to a mortgage by a mortgagor where the proceeds of that sale would be at least sufficient to discharge the debt owing to the mortgagee: see Palk at 418-420; and Krausz at 1562.
223 Further, Phillips LJ in Krausz observed (at 1562) that this practice was partially grounded in the fact that a mortgagor has a better incentive to achieve a better sale price than the mortgagee:
In cases before Palk's case, where the proceeds of sale were likely to exceed the mortgage debt, the court was prepared to entrust the sale to the mortgagor on the basis that the mortgagor had a keener interest than the mortgagee in obtaining the best price.
224 With the above in mind it may be observed that the position of a puisne mortgagee wishing to sell a property against the wishes of a superior mortgagee is analogous to the relationship between a mortgagor wishing to sell against the wishes of a mortgagee.
225 I accept that the practice of courts of equity is to exercise the discretion to order the sale of property by a mortgagor where the sale would be sufficient to discharge in full the debt to the mortgagee. That practice logically supports the view that where a second mortgagee possesses a statutory power of sale, that power should not be restricted so as only to be exercisable where the funds necessary to discharge in full the debt to the first mortgagee are tendered in advance of the sale. This is provided, of course, that the sale in question is sufficient to discharge the debt or where any shortfall between the sale price and the debt is secured by some other security provided by the second mortgagee. To construe s 77(1) in the way that Runner and Jasper contend (that is, as imposing a requirement to tender payment to the first mortgagee in advance of the sale rather than from the proceeds of sale) would be inconsistent with the practice as outlined in Palk and Krausz, and with longstanding equitable principle.
226 The fact that a second mortgagee may have a "keener interest" in obtaining a better sale price than does the first mortgagee supports the conclusion that a second mortgagee may exercise its power of sale under s 77(1) of the TLA and pay out the first mortgagee from the proceeds of sale, provided that the first mortgagee is paid out in full or that some other security is provided for any shortfall.
227 In the same way it is not open to Runner to insist that repayment be sourced from a refinancing rather than from the proceeds of sale because in equity both produce the same result - discharge of the first mortgage and redemption. As Mt Duneed submits, Runner's obligation to discharge arises from the payment of what is due, not the means of payment. Mt Duneed cites Graham v Seal, Santley v Wilde and Noakes v Rice in this respect. These cases are all consistent with the Privy Council's analysis in Kaolim. As their Lordships observed in Kaolim, the first mortgage will be discharged in advance of the receipt of the purchase money, "or out of the purchase money before the net amount is paid to the mortgagor". The submissions of Runner and Jasper provide no answer to this point.
228 Turning then to Mt Duneed's reliance on s 50 of the PLA, contrary to the submissions of and Runner and Jasper, I accept that in the circumstances of the present case this section would have empowered the court to grant the relief sought by Mt Duneed. Section 50 is in the following terms:
Discharge of incumbrances by the Court on sales or exchanges
(1) Where land subject to any incumbrance, whether immediately realizable or payable or not, is sold or exchanged by the Court, or out of court, the Court may, if it thinks fit, on the application of any party to the sale or exchange, direct or allow payment into court of such sum as is hereinafter mentioned, that is to say -
(a) in the case of an annual sum charged on the land, or of a capital sum charged on a determinable interest in the land, the sum to be paid into court shall be of such amount as, when invested in Government securities, the Court considers will be sufficient, by means of the dividends thereof, to keep down or otherwise provide for that charge; and
(b) in any other case of capital money charged on the land, the sum to be paid into court shall be of an amount sufficient to meet the incumbrance and any interest due thereon -
but in either case there shall also be paid into court such additional amount as the Court considers will be sufficient to meet the contingency of further costs, expenses and interest, and any other contingency, except depreciation of investments, not exceeding one-tenth part of the original amount to be paid in, unless the Court for special reason thinks fit to require a larger additional amount.
229 It is not correct to suggest, as Runner and Jasper did, that this provision may not apply to Torrens land. As Mt Duneed submitted, s 50 is not contained in Div 3 of Pt II of the PLA and thereby excluded by operation of s 86.
230 Nor can it be accepted, as Runner and Jasper contended, that s 50 requires payment into court of the amount of the mortgage debt and further amounts for costs, expenses and interest before the court can order that the incumbrance be removed. I accept Mt Duneed's submission that to so interpret the section would be inconsistent with its plain words and its express purpose. It would also be inconsistent with equitable practice as outlined in Palk and Krausz to which I have referred above. Section 50 is concerned with the sale or exchange of land subject to any incumbrance. It cannot properly be regarded as requiring payment into court prior to its operation. As Mt Duneed submitted, such a requirement would serve to defeat its operation, preventing a mortgagor who has sold and wishes to bring a recalcitrant mortgagee to settlement from resort to the section for that purpose.
231 Further, and as has been observed, s 50 of the PLA is the Victorian enactment of s 5 of the 1881 Act. The purpose of s 5 of the 1881 Act was, in substance, to allow for land to be conveyed to a purchaser so that the purchaser takes the land free from incumbrances. As much is clear from Sargant J's observations in Re Wilberforce's Trusts [1915] 1 Ch 94 at 102:
Prima facie, the object of the whole of s.5 is not to disturb any vested or other rights more than is necessary, but to enable a sale to be effected and the property to be transferred to the purchaser notwithstanding there may be on the land a liability for payment of a future sum which would, but for the provisions of the section, clearly have prevented the sale of the land free from incumbrance. Of course, a purchaser might think fit to take the land subject to the incumbrance, but the purchase of land subject to an incumbrance is not usually a desirable investment, and the object of the section was to enable the land to be conveyed to the purchaser so that he might get a full and complete title to it.
232 There is no reason to suppose that the Victorian Parliament, when enacting s 50 of the PLA, would not have intended for it to operate in the same way as s 5 of the 1881 Act. Runner's submission that before the court can order that an incumbrance on property be removed, pursuant to s 50 of the PLA, there must be payment into court of the mortgage debt and further amounts for costs, expenses, and interest, must thus be rejected. To read s 50 in such a way would be to undermine the central purpose of the section, which is to enable, with ease, conveyance to a purchaser of property free from incumbrances. It cannot be the case that s 50 was intended to operate so that a first mortgagee could, by insisting on payment into court prior to the sale (rather than from the proceeds of sale) stymie the transfer of property to a purchaser free from incumbrances. This reading of s 50 of the PLA is consistent with the approach adopted by Bryson J in Equus: see at 747-748.
233 I also accept Mt Duneed's submission that the court has the power, pursuant to s 116 of the TLA, to order the delivery up of the certificate of title to the Land at settlement of the Contract of Sale. Mt Duneed submitted that the relevant power of the court is to be found in s 116A(1A) of the TLA, which is as follows:
An interested person may apply to the court by summons … for an order directing another person to produce a certificate of title of document for the reasons stated in the application.
234 On the basis of Fincore, in which an order was made against a registered proprietor at the suit of an equitable mortgagee (as an "interested person", see at [31]), I accept that Mt Duneed, as a registered mortgagee would have been an "interested person" for the purposes of s 116A(1A).
235 It may be observed, however, that s 116A(1A) does not in terms grant the power to the court to order the production of the certificate of title, as Mt Duneed submitted. That section is about which parties may apply to the court for such an order of production. The court's power to order production is to be found in s 116A(3)(a) of the TLA, which is relevantly in the following terms:
(3) The court … may-
(a) order the person to produce the document upon such terms or conditions as the court … thinks fit …
236 I accept therefore that s 116A(3) of the TLA gives the court the power to order the relief sought by Mt Duneed. For the reasons that it would be inconsistent with a second mortgagee's rights as expounded in Kaolim and the equitable practice described in Palk and Krausz, I do not consider that the court's power under s 116A(3) is limited such that it may only order delivery up of the certificate of title where a second mortgagee itself has tendered payment to the first mortgagee prior to the sale, rather than from the proceeds of sale.
237 Any concern that the first mortgagee may lose protection as a result of an order being made under s 116A(3) of the TLA for delivery up of the certificate of title and an order under s 50 of the PLA for the relevant incumbrances on the Land to be removed could be accommodated. There could have been an order that the Land shall be deemed to be discharged from all liability on account of the first mortgage immediately, and conditional, upon the following two events occurring:
(a) the amount of $3,038,960.57 being paid to Runner; and
(d) the remainder of the sale price being paid into court pending a taking of accounts.
238 This would have protected Runner's interests by ensuring that its incumbrance continues to operate upon the Land until such a time as it is both paid out the price it paid to purchase the first mortgage and is given security (in the form of the amount paid into court) for any additional amount it may be owed.
239 The practical effect would have been that settlement (under the Contract of Sale and pursuant to Special Condition 1(c) thereof), removal of the first mortgagee's incumbrance, and the moment when both conditions specified in 237 above were satisfied, would have been simultaneous.
240 There is no need, therefore, to engage substantively with the submissions of Runner and Jasper that Equus stands for the principle that a court should not make an interlocutory order to require a mortgagee to give up his security (being the incumbrance on the property) where there is no reasonable protection available to the first mortgagee for funds owed under the mortgage to the first mortgagee. This is because orders could have been made providing reasonable protection to the first mortgagee.
241 Turning, finally, to Runner and Jasper's submission that Mt Duneed has failed to obtain a proper price for the Land, this point should be rejected also. There is of course no doubt that a duty to obtain a proper price is owed by a puisne mortgagee who wishes to exercise the s 77(1) power of sale: see, for example, MBF Investments Pty Ltd v Nolan [2011] VSCA 114 at [86] (Neave, Redlich and Weinberg JJA) where the court acknowledged the mortgagee's duty to take reasonable steps to obtain the best price, and their Honours noted, at [65], that the words of s 77(1) must be interpreted against the background of the equitable principles which control the exercise of the mortgagee's power of sale.
242 The relevant case law refers variously to the obligation to obtain the "best price" and "a proper price". However, the nature of the duty to take reasonable steps with respect to securing a particular price is not to be interpreted as if it requires that, necessarily, the absolute best price must be secured by a mortgagee wishing to sell in exercise of the power in s 77(1). The particular circumstances of a given case will be determinative of the extent of the range of price(s) which will be acceptable in accordance with the duty. In some cases, that range may extend beyond the best price reasonably obtainable to a number of permissible reasonably obtainable prices. In Kravchenko v The Rock Building Society (2009) 26 VR 400 at 404 (speaking in the context of a mortgagee's duty to a mortgagor when exercising the s 77(1) power), Buchanan JA said as follows:
[A]s the mortgagee is entitled to prefer his own interests while taking reasonable care to protect the interests of others, in certain circumstances it may be that a mortgagor will be justified in accepting a price that is less than the best price that could reasonably be obtained, but is a price that can be described as proper.
In this area of law, as in the law generally, context is everything: R v Secretary of State for the Home Department, Ex Parte Daly [2001] UKHL 26; 2 AC 532 at [28] (Lord Steyn).
243 In my assessment the present case is one where a proper price, for the purposes of the duty to obtain a proper price, is not confined strictly to the best price which might be reasonably obtainable. There are a number of matters which compel this conclusion.
244 The first, and most obvious, is that the price for the sale of the Land as agreed in the Contract of Sale is significantly higher than the market value of the Land as determined by the valuation prepared by Preston Row Paterson (PRP) on 16 September 2021. PRP valued the Land at $5,220,000 and I accept that that valuation was indicative of the objective market value of the Land at the time of PRP's valuation.
245 Relative to that valuation, the price under the Contract of Sale represents an approximately 42 per cent increase. The price under the Contract of Sale was offered approximately three months after PRP's valuation, and although no evidence was led as to any market fluctuations over that three month period, I am prepared to assume that market conditions did not account for an increase of this magnitude in the value of the property in that period. On the basis of this assumption it is clear that the price under the Contract of Sale represented a price significantly above the market value of the Land.
246 A further matter is that the duty to obtain a proper price is partially conditioned by the equitable principles controlling a mortgagee's power of sale: see Nolan, at [65]. As Mt Duneed has submitted, "once a mortgage, always a mortgage". In other words, a mortgagee's interest in a mortgage is limited to securing repayment of the funds which are due under the mortgage at any given time; no more and no less. Here it is of critical relevance that the performance of the Contract of Sale would have led to repayment in full of the debt owed to Runner under the first mortgage (as finally determined on a taking of accounts), a fact conceded in paragraph [10] of Runner's cross claim.
247 The confluence of the equitable principle that a mortgagee's interest is limited to repayment in full of the debt due to it under the relevant mortgage and the fact that Runner (as the relevant mortgagee) would have been repaid in full upon settlement of the Contract of Sale, militates in favour of a conclusion that in this case there may be a number of proper prices (along a continuum) which might reasonably be obtained and at which Mt Duneed might have sold.
248 The third point to note is that it is uncontroversial that the other relevant interested parties in the Land - being Jasper as third mortgagee, and PE Capital as mortgagor (and PE Capital's liquidators) - would not have received any funds from any sale of the Land. Jasper admits as much in its written submissions at [9]; and the liquidators agree with the sale of the Land to Mr Koch.
249 In light of the insufficiency of any sale to provide payment to any party beyond Mt Duneed, Mt Duneed is the only party with an incentive to achieve the highest possible price (beyond the value of the debt to Runner under the first mortgage). This fact provides an additional reason for concluding that in the circumstances of this case there may have been a number of proper prices at which Mt Duneed might have sold the Land in exercise of the power in s 77(1) of the TLA. Logically, the range of proper prices in this case begins at the minimum price which would be sufficient to discharge the First Mortgage Debt to Runner in full. Given, however, the uncertainty as to the precise amount due to Runner (which would have needed to be determined by a taking of accounts after the sale of the Land), a party in Mt Duneed's position should be able to satisfy the court that there is no reasonable suspicion that the sale price in question would leave any senior mortgagee in a position in which it was not repaid in full. I am satisfied that the sale price of $7,400,000 in the Contract of Sale with Mr Koch would have left no such reasonable suspicion.
250 Having determined that this case is one in which there may have been a range of proper prices at which Mt Duneed might have sold the Land in exercise of its s 77(1) power, it is necessary to determine whether Mt Duneed had selected a price within that range. That second task is one which, at least on the facts of this case, overlaps significantly with the task of determining the range at which the subject of the duty to obtain a proper price. The reasons I have proffered above in support of my conclusion that there may be a range of proper prices are also reasons which support my conclusion that Mt Duneed selected a price within the permissible range.
251 In all the circumstances I consider that Mt Duneed did not need to make any further reasonable inquiries to obtain a proper price. Whilst it is possible that a higher price might have been obtained if, as Runner and Jasper submitted, Mt Duneed had run an advertising or marketing campaign, such a hypothetical higher price would have been subject to additional advertising or marketing fees which would have eaten into (and perhaps outstripped) any gross difference between the price under the Contract of Sale and any higher possible price. The marginal utility of an advertising or marketing campaign was, in my assessment, likely to have been low.
252 Further, it is to be emphasised that the price under the Contract of Sale was significantly above the market value of the Land. In these circumstances it was reasonable for Mt Duneed to accept that price without making any further inquiries.
253 I would have concluded therefore that Mt Duneed had discharged its duty to take reasonable steps to obtain a proper price pursuant to s 77(1) of the TLA.
254 However, even if I am incorrect in concluding that Mt Duneed had discharged its duty to obtain a proper price, I would not have concluded that any possible breach of that duty would have been a sufficient basis to restrain the sale of the Land. Speaking about the general law duty of a mortgagee to a mortgagor when exercising a power of sale in Ultimate Property Group Pty Ltd v Lord (2004) 60 NSWLR 646 at [40], Young CJ in Eq observed:
it is a fundamental principle in the textbooks that mere inadequacy in the price obtained and the value will not normally be of itself sufficient for a mortgagor to upset a purported sale.
255 I accept that the situation is analogous as between puisne mortgagee and senior mortgagee. Given that Runner would have been paid out in full as a result of the performance of the Contract of Sale, that Jasper has no prospect of being repaid any of the debt due to it under the third mortgage, that the liquidators consented to the sale to Mr Koch, and that there do not appear to be any other relevant factors which would have weighed in favour of restraint of Mt Duneed's exercise of the power in s 77(1), I consider that this is the sort of case in which mere breach of the duty to obtain a proper price would have been insufficient to upset the sale.
256 Further, I do not consider that the Victorian Parliament could have intended that a putative exercise of the mortgagee power of sale pursuant to s 77(1), when that section is construed against the equitable principles regarding a mortgagee's power of sale at general law, would be invalid as a result of non-compliance with the duty to obtain a proper price as a condition of the exercise of power. To put this another way, I consider that Parliament's purpose in enacting the duty to obtain a proper price was to protect the interests of other parties interested in the property the subject of a particular mortgagee's putative exercise of its s 77(1) power of sale. With that purpose in mind, Parliament cannot have intended that breach of that duty should invalidate an exercise of the power in s 77(1) in circumstances where a first mortgagee is to be paid out in full from the proceeds of the relevant sale and any puisne mortgagee (relative to the mortgagee exercising the power) has no prospect of being repaid. Those are the relevant facts here.
257 For these reasons I would not have restrained Mt Duneed's exercise of the power of sale pursuant to s 77(1) even if I had concluded that Mt Duneed had breached its duty to obtain a proper price. The apparent circumstances of Runner's sale of the Land to South Reeve for the sum of $4,820,000 only serve to fortify this conclusion.