Facts
- Law Partners Mortgages Pty Ltd (LPM) loaned $320,000 to Price in 1998, and secured the loans by mortgages over land.
- Spoor, successors in title to LPM, brought proceedings as mortgagees and claimed monies owing under two secured mortgages. Additionally, they sought possession of the land the subject of the mortgages.
- Price argued that Spoor were statute-barred from bringing the action for debt pursuant to sections 10, 13 and 26 of the Act.
- Further alleged that the respondents’ title under the mortgages had been extinguished by operation of section 24 of the Act.
- Section 24 of the Act provided that where the relevant time period within which a person “may bring an action” to recover land had expired, “title” to that land “shall be extinguished”.
- The respondents relied on clause 24 of each mortgage, which they contended amounted to a covenant on the part of the appellants not to plead a defence of limitation. The Respondents were unsuccessful at first instance.
- The Court of Appeal allowed the appeal, holding that it was possible to contract out of the defences conferred by the Act and that section 24 did not apply to that case.
Issues
- Whether a particular provision of the Act automatically extinguishes a mortgagee’s title to the mortgaged land at the end of the limitation period.
- Whether the terms of the contract allowed the parties to “contract out” a statutory limitations period.
Held
- The High Court held that clause 24 in the mortgage agreement allowed the parties to “contract out” of the limitation period.
- Clause 24 was interpreted by reference to how a reasonable person would have understood the clause to mean. In this situation, the clause clearly intended to permit a broad application.
- Further, the word “defeat” expressly contemplate “defeating” provisions of the limitations statute.
Full Text
The full text is available here: https://eresources.hcourt.gov.au/showCase/2021/HCA/20
-- Download Price v Spoor [2021] HCA 20 as PDF --

