ST CLAIR v NEWCASTLE PERMANENT BUILDING SOCIETY [1991] NSWCA 257

ST CLAIR v NEWCASTLE PERMANENT BUILDING SOCIETY

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

PRIESTLEY, CLARKE JJA and Hope AJA 24 April 1991, 24 April 1991 [1991] NSWCA 257

REAL PROPERTY — MORTGAGE UNCERTAINTY — SEVERANCE CONSTRUCTION OF MORTGAGE

Clarke JA This is an appeal from a judgment of Badgery-Parker J in which his Honour entered judgment for the respondent for the possession of the whole of the land comprised in Certificate of Title vol 10062 folio 101 beiNg the property known as 52 Yarranabbe Road, Darling Point.

Before his Honour it was not in issue that the appellant had defaulted under two mortgages, to which I will shortly refer, between the parties but there were two matters of defence raised which were said to disentitle the respondent to the order for possession which his Honour ultimately made.

The two issues which these defences raised can be shortly stated: first, whether the mortgages and each of them were so uncertain that the law would not recognise them as binding contracts between the parties. Secondly, whether, even if there was a measure of uncertainty arising from the specific clauses in the mortgage, that uncertainty did not, because of the principles of severability, affect the primary obligation or the primary security afforded by the mortgages. His Honour dealt only with the first of the two issues and because of his conclusions on that aspect of the case he did not come to deal with severability.

Upon the appeal counsel for the appellant has submitted that his Honour was in error in his conclusion on what I would describe as the uncertainty point and submitted that there could be no question of severability in the event that his submissions on the first point were correct. In his argument he advanced reasons designed to demonstrate that the clauses with which his Honour was concerned were so unextricably bound up with the primary obligations under the mortgage as to destroy any suggestion that the principles of severability could apply.