The appellant, DJ Fry, borrowed money from the first respondent, Permanent Mortgages, with the second respondent La Trobe being the mortgage manager to secure a registered mortgage over land held by DJ Fry for purpose of property development. Development approval was granted but DJ defaulted on its mortgage payments so Permanent Mortgages exercised its power of sale over the property. La Trobe engaged a real estate agent to advertise and sell the property by public auction.
The sale advertisement of the property gave rise to these proceedings. DJ Fry contended the property was sold at an undervalue and commenced proceedings against Permanent Mortgages and La Trobe seeking an account of all sums due in respect of the sale and damages for breach of duty. The breach of duty was alleged to be under s 85(1) of the Property Law Act 1974 (Qld), s 420A of the Corporations Act 2001(Cth), or at common law. The alleged breach of duty was by reason of: (a) advertising the property with the existence of a development application in the written advertisements and announcing at the public auction that there was no development approval, (b) failing to actively and effectively advertise and/or have an appropriately focused or directed marketing campaign to sell the property, (c) the advertisement for the public auction incorrectly referred to a “Development Application for 49 lots”, when in fact that the property had a development approval for 49 lots, which attached to land, and (d) selling the land without regard to the existence of the development approval.
The judgment is published here.