TUTORIAL: MORTGAGES Question 1 Bob and Shirley Williams own the Fox and Rooster pub in Blackbutt, Queensland. The pub is located on the Bruce Highway. As a result, the Fox and Rooster has been very popular amongst the 'grey nomads' who like its friendly atmosphere and tasty, but affordable, meals. Bob and Shirley's house is located on the same property as the pub. First Financial Bank Limited holds a registered mortgage over this property. Late last year, the Bruce Highway was upgraded and, during that time, all traffic was redirected around Blackbutt. Bob and Shirley suffered a significant downturn in business during this period and fell behind in their mortgage repayments. As a result, First Financial Bank issued Bob and Shirley with a default notice ('the Notice'). The Notice was addressed to Bob and Shirley Walliams. It stated that Bob and Shirley were in default under the terms of the mortgage and demanded the repayment of $807,399.31 (which was the correct amount owing under the mortgage at that time). The Notice stated 'unless within 21 days of service upon you of this notice the default is remedied, the mortgagee may proceed to sell the land and exercise all or any of the other powers conferred by the mortgage and by the Property Law Act 1974.' Twenty-one days have passed since Bob and Shirley received the Notice and they have been unable to remedy the default in this period. First Financial Bank Ltd has issued a Notice of Exercise of Power of Sale to Bob and Shirley and has had the property listed for sale on realestate.com.au. Advise Bob and Shirley whether they can prevent First Financial Bank Ltd from exercising its power of sale. Question 2 Karen and Trent Jones own a penthouse unit at 123 Hastings Road, Noosa Queensland. They were lucky enough to have won the penthouse (that was valued at $2 million) in a Boystown raffle in July 2018. After moving into the property Karen and Trent quickly discovered that their old furniture, clothing and motor vehicles really did not suit their new luxury lifestyle. They approached Mega Bank Ltd in early 2019 for a personal loan to fund their new appetite for luxury goods. Mega Bank Ltd approved a loan of $500,000 subject to a mortgage over the penthouse. Karen and Trent signed the loan and mortgage documents on 31 March 2019 and Mega Bank Ltd's mortgage was registered over the property on 3 April 2019. Late last year Trent lost his job as a car salesman and Karen and Trent fell behind in their mortgage repayments to Mega Bank Ltd. Mega Bank Ltd issued a default notice ('Notice') to Karen and Trent on 28 February 2021. Mega Bank Ltd employed Brisbane City Realty to sell the property. Brisbane City Realty is a real estate agency dealing almost exclusively with Brisbane CBD properties. The agents employed there are specialists in Brisbane CBD properties but have little knowledge of properties outside this area.
Brisbane City Realty advertised