Question
In 2020 Wilma Flintstone purchased five adjoining, identical holiday units overlooking Port Phillip Bay at the Victorian holiday resort of Dromana. Each unit was on
In 2020 Wilma Flintstone purchased five adjoining, identical holiday units overlooking Port Phillip Bay at the Victorian holiday resort of Dromana. Each unit was on a separate title, and Wilma paid the purchase price for the five units with the help of a loan from ABZ Finance Company. The loan was secured by a mortgage over all five units. The mortgage was registered against each title. In early April 2023, Wilma stopped making loan repayments. A month later, ABZ gave her proper notice under the provisions of the Transfer of Land Act 1958 (Vic) that it would proceed with a mortgagee sale to recover the outstanding debt of $2 million unless she remedied the default within one month. She did not remedy the default. The ABZ employee who handled the sale preparation was Adam. In early July 2023, Adam engaged a valuer to appraise the units. The valuer recommended that Adam engage a local real estate agent from Dromana, and that the agent sell the units individually during the next summer's holiday season. This way, explained the valuer, the units would probably go for a total of between $3million and $3.5 million. If sold in a single sale to a single buyer as a 'package', the valuer thought the units would probably only go for around $2.5 million at the most. Adam had no desire to manage five separate sales and campaigns spread across the spring months. As it happened, ABZ 's head office, where Adam worked, was in Footscray, next door to a real estate office for Palmer and Sons Realty. Adam decided to instruct Palmer and Sons to auction the units in on 12 November 2023 as a 'one line' sale: that is, all five units offered together. He also instructed the agents to arrange for a large sign to be erected on the property describing the property and indicating that it was to be auctioned on12 November, and to place an advertisement in the local Dromana newspaper and in the Age online real estate listings. At the auction Simon Sayeed was the successful bidder, having the units knocked down to him for $2.6 million. Simon became the registered proprietor of the fee simple in the five units shortly thereafter. Simon quickly made a profit on his investment. Between December 2023 and March 2024 he put the individual units on the market and by the end of March 2024 each of the five units had been sold for $700,000 to city dwellers looking for holiday weekenders. Settlement has not yet taken place on any of these sales. (a) Was the sale by ABZ to Simon proper? (b) If the answer to (a) is 'no', is Wilma entitled to have the sale to Simon set aside?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started