(1) [Section 78 Subsection (1) amended by No. 36 of 2012, s. 28, Applied:13 Nov 2012] After default in payment or in observance of covenants continuing for the further period of 30 days from the date of service or publication of the notice pursuant to section 77 , or for such other period as may be limited for that purpose in the memorandum of mortgage or memorandum of encumbrance, the mortgagee or encumbrancee may, in good faith and having regard to the interests of the mortgagor, encumbrancer, and other persons –
(a) [Section 78 Subsection (1) amended by No. 23 of 2021, s. 69, Applied:01 Jan 2022] sell or concur with any other person in selling the mortgaged or encumbered land or any part of that land, altogether or in lots, in such manner and subject to such terms and conditions as the mortgagee, or encumbrancee, respectively, thinks fit; and
(b) for the purpose of making a sale of the land or any part of the land at the best price, do anything that the mortgagor or encumbrancer could do in relation to the land.
(2) *[Section 78 Subsection (2) amended by No. 30 of 1995, s. 3 and Sched. 1 ]*Without limiting the generality of subsection (1)(b) , the mortgagee or encumbrancee may –
(a) subdivide, change the use of, or otherwise develop the land;
(b) carry out works upon the land;
(c) set aside part of the land for purposes other than sale, in the course of subdivision;
(3) Anything made, done, or executed by the mortgagee or encumbrancee in pursuance of this section shall be as valid and effectual as if made, done, or executed by the mortgagor or encumbrancer.
(4) [Section 78 Subsection (4) amended by No. 23 of 2021, s. 69, Applied:01 Jan 2022] The receipt in writing of the mortgagee or encumbrancee shall be a sufficient discharge to the purchaser of the land or any portion of the land for so much of the purchaser’s purchase-money as may be expressed to be received by the receipt.
(6) A memorandum of transfer by a registered mortgagee or encumbrancee expressed to be in exercise of the power of sale conferred by this Act may be accepted by the Recorder as sufficient evidence that the power of sale has been duly exercised.
(7) The purchase-money received by a mortgagee who has exercised the power of sale conferred by this section, after discharge of prior mortgages and encumbrances to which the sale is not made subject (if any), shall be applied –
(a) firstly, in payment of all costs, charges, and expenses properly incurred, incidental to or for the purpose of the sale, or any attempted sale, or otherwise consequent on the default;
(b) secondly, in payment of the money which is due and owing on the mortgage;
(c) thirdly, in payment of subsequent mortgages and encumbrances (if any) in the order of their priority;
(d) fourthly, in satisfaction of the claims of all persons who have lodged caveats subsisting when the power of sale was exercised, in accordance with their respective rights and priorities; and
(e) fifthly, in payment of the residue (if any) to the mortgagor.
(8) The purchase-money received by an encumbrancee who has exercised the power of sale conferred by this section, after discharge of prior mortgages and encumbrances to which the sale is not made subject (if any), shall be applied –
(a) firstly, in payment of all costs, charges, and expenses properly incurred, incidental to or for the purpose of the sale, or any attempted sale, or otherwise consequent on the default;
(b) secondly, in accordance with any express provision in the memorandum of encumbrance for disposing of the money (either by setting aside the proceeds of sale or part of the proceeds of sale on investment to meet future periodical payments, or by payment to the encumbrancee out of the proceeds of a sum being the estimated capital value of the encumbrancee's interest, or otherwise); and in the absence of any provision in the memorandum of encumbrance for disposing of the money, in payment of the money which is due and owing on the encumbrance at the date of the sale;
(c) thirdly, in payment of subsequent mortgages and encumbrances (if any) in the order of their priority;
(d) fourthly, in satisfaction of the claims of all persons who have lodged caveats subsisting when the power of sale was exercised in accordance with their respective rights and priorities; and
(e) fifthly, in payment of the residue (if any) to the encumbrancer.
(9) Where by this section a mortgagee or encumbrancee is required to account to a subsequent encumbrancee for money arising on a sale, the money shall be paid or applied in accordance with the express provision (if any) in the memorandum of encumbrance for disposing of the money, and, in the absence of express provision, in discharge of the money due to the subsequent encumbrancee at the date of the sale.
(10) Notwithstanding anything contained in subsection (9) , where by this section a mortgagee or encumbrancee is required to account to a subsequent mortgagee or encumbrancee for money arising on a sale –
(a) [Section 78 Subsection (10) amended by No. 23 of 2021, s. 69, Applied:01 Jan 2022] the mortgagee, or encumbrancee, respectively, may pay to the subsequent mortgagee or encumbrancee such sum as the subsequent mortgagee or encumbrancee claims in writing is owing upon the security of the subsequent mortgage or encumbrance; and
(b) the subsequent mortgagee or encumbrancee, and not the mortgagee or encumbrancee making the payment, is accountable to the mortgagor or encumbrancer for any amount in fact overpaid.
(11) [Section 78 Subsection (11) amended by No. 23 of 2021, s. 69, Applied:01 Jan 2022] Where a mortgagee or encumbrancee cannot reasonably ascertain how the mortgagee or encumbrancee is to satisfy claims of persons who have lodged caveats, the mortgagee or encumbrancee, respectively, may pay all money available to satisfy those claims into the Supreme Court, and the receipt or certificate of the proper officer of the Supreme Court is a sufficient discharge to the mortgagee or encumbrancee for the money so paid in, and that money shall be dealt with in accordance with the orders of the Supreme Court.