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 Court was asked to determine whether it was lawful to contract out of the operation of the operation of the Limitations of Actions Act 1974 (Qld) and, if so, whether, on the proper construction of the mortgage, the parties had evinced an intention to do so.
Consistent with Commonwealth v Verwayen (1990) 170 CLR 394, Dalton J observed that it was lawful to contract out of the operation of ss 10 and 13 of the Limitations of Actions Act 1974 (Qld). However, her Honour held that the parties could not contract out of the operation of s 24. In her Honour’s view, the mortgagee held title to the land, but it was extinguished by s 24 of the Limitations of Actions Act 1974 (Qld).
Further, her Honour found 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.
Nicholas Andreatidis QC, Anthony Messina and Jason Mitchensen appeared for the mortgagee, instructed by Mullins Lawyers.
The judgment is available here.