Well outside the statutory limitation period, a mortgagee brought a claim for payment of principal and interest owing under a registered mortgage, and an order for possession of the land which secured the obligation to pay. In defence of the claim, the mortgagor pleaded a limitations defence. In reply, the mortgagee pleaded that, by an express covenant of the mortgage, the parties had contracted out of the operation of the Limitations of Actions Act 1974 (Qld).
On an application for summary judgment, the Primary Court dismissed the proceedings on the basis that the covenant under consideration was ambiguous and construed it contra proferentem against the mortgagee; even if the parties could lawfully contract out of the operation of s 24, on the proper construction of the mortgage, they did not evince an intention to do so.
The Court of Appeal allowed the appeal finding in effect that the construction of the covenant urged on behalf of the mortgagee was correct and the parties had contracted out of the limitation period. The Court of Appeal found that the Primary Court was correct in holding that consistent with Commonwealth v Verwayen (1990) 170 CLR 394, it was lawful to contract out of the operation of the Limitations of Actions Act 1974 (Qld).
Nicholas Andreatidis QC, Anthony Messina and Sophie Gibson appeared for the mortgagee, instructed by Mullins Lawyers.
The judgment is available here.
