Mortgages

AIMS & OBJECTIVES

This hypothetical aims to provide you with an opportunity to demonstrate your understanding of a doctrinal area of property law. On completing this hypothetical, you should have:

• read thoroughly in the particular area relevant to the question.
• written a well-structured, clearly expressed response to the question.
• identified key issues and provided a coherent resolution of each issue.
• used proper referencing.

GENERAL INSTRUCTIONS

Length: Maximum of 1000 words. Matters of substance must be included in the body of the text, not in footnotes. Please use a font of not less than 12-point type and margins not less than those on this document. Where an answer exceeds the word limit by more than 15%, a line shall be drawn at that point and the remainder of the answer shall not be taken into account in marking the answer.

Weight: Hypothetical Problem 1 is worth 20 marks

Research: You are expected to use information from essential reading listed in the topic study guides and may use information listed in further reading in the topic study guides. There is no need to research any further than these sources.

Plagiarism Warning & Referencing: When using published sources (eg statutes, case law and secondary materials) you must cite them in a footnote. To fail to do so is plagiarism. It is also poor legal argumentation: your argument will be stronger if you can give external authority for ideas or propositions, and then build on those authorities with your own, clearly expressed, reasoning. Plagiarism also occurs if you hand in work that is essentially similar in any key respect to that of another student. Both forms of plagiarism are serious forms of academic misconduct (see the Section 6 of the Course Profile for further information and warnings about academic integrity).

Note the following simple conventions for referencing primary legal materials:

• the short title of the Act, followed by ‘s’ or ‘ss’, for a particular section or sections.
• similarly for cases, use the short version of the case name + citation, and page reference if any (eg Applicant v Respondent (1904) 1 CLR 154 at 155.) For subsequent references it is okay to use part of the case name (eg Bahr or Smith case).
• for other sources, refer to the Australian Guide to Legal Citation (3rd edition). The Guide is downloadable via http://law.unimelb.edu.au/__data/assets/pdf_file/0007/1586203/FinalOnlinePDF-2012Reprint.pdf.

ASSESSMENT CRITERIA

The assessment criteria for the hypothetical are as follows:

• issue identification.
• identifying relevant legal provisions/principles.
• quality/coherence of analysis and argument in applying relevant legal provisions/principles.
• quality of written expression (effectiveness of headings; style/clarity; expression/grammar; spelling; punctuation and referencing).

Hypothetical Problem 1

Laura Drott operates a retail cycling business. She owns a small commercial premise on the Gold Coast in which to sell bicycles and accessories. She is the registered proprietor of the fee simple. In order to raise funds to allow her to commence her business Laura had obtained a loan from Supporting your Dreams Bank (SDB) in March 2012. SDB advanced Laura the amount of $200,000, with the mortgage requiring repayment of the principal plus annual interest of 6% over 8 years in monthly instalments. Security for the loan was provided by a registered mortgage over the business premise. SDB agreed to the loan only after advising Laura to seek independent advice before entering into the mortgage.

Once the retail business was opened, Laura quickly developed a large and growing customer base. However, by 2014 her profitability started to decline. Her customers deserted her in increasing numbers for the large online retailers offering cycling goods at lower prices. By 10 November 2015 Laura’s business was running at a significant loss, and she failed to make a monthly repayment. SDB issued a notice of default in correct form on 15 November 2015, seeking payment of the outstanding instalment. In January 2016, no repayment having been made by Laura, SDB exercised a power of sale. SDB obtained an independent valuation of $350,000 for the property, advertised the property widely and disclosed all relevant information about the property. Sale at auction occurred on 3 March 2016, with the property selling for $320,000. There was only one bidder at the auction, and Laura has discovered that the buyer was Distressed

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