26Adjustment of interest

26 Adjustment of interest (1) In an action for redemption or otherwise in relation to a mortgage of property including an action in relation to the proceeds of sale or other realisation of property subject to a mortgage— (a) a mortgagor is not, as against a mortgagee, to be required to pay or bear interest that could not, because of a period of limitation fixed by or under this Act, be recovered in an action by that mortgagee against that mortgagor brought on the date when the firstmentioned action is brought; and (b) in adjusting the rights of a mortgagor and a mortgagee the mortgagee is not to be entitled to the interest mentioned in paragraph (a). (2) If— (a) interest becomes due under a mortgage; and (b) a mortgagee— (i) holds money on the date when the interest becomes due; or (ii) after that date but before the end of the limitation period fixed by or under this Act for an action on a cause of action to recover that interest by that mortgagee against a mortgagor, receives money; and (c) before or after the bringing of an action to which subsection (1) applies, that mortgagee or a person claiming through him or her properly applies that money in or towards satisfaction of that interest; subsection (1) does not, as against the person so applying that money or a person claiming through him or her, apply to that interest to the extent to which it is so satisfied.

Periods of limitation and related matters Part 2 Trusts Division 2.4 Section 27 R28 26/11/25 Limitation Act 1985 Effective: 26/11/25 page 21 Authorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au Division 2.4 Trusts