Mortgage terms preclude mortgagor from relying on Limitation of Actions Act 1958 (Vic) in seeking a discharge of mortgage (Ward v McDonald)

Date: 23 April 2025
Court: Supreme Court of Victoria – Common Law Division 
Judge(s): Finanzio J 
Judgment date: 16 April 2025 
Catchwords: Mortgage; Discharge of mortgage; Exclusion of limitation periods in the Limitation of Actions Act (Vic) 

Abstract:

The Supreme Court of Victoria held that a mortgage covenant excluding the operation of statutes that adversely affect mortgagee's rights effectively prevented the mortgagor from relying on limitation periods under the Limitations of Actions Act 1958 (Vic).

Facts: In 2004, the plaintiff (Ward) and her then-partner (Ellery) borrowed $361,306.11 (the loan) from Ellery's sister (Tracey Ellery) and her husband to purchase property. Subsequently, Ward became sole registered proprietor of the property, with the mortgage registered on the title (including covenants set out in a memorandum of common provisions (MCPs)) as security for the loan. The loan was due for repayment by June 2006 but remained unpaid. By 2021, following various events including Tracey Ellery's death, McDonald became executor of Ellery's estate and representative of mortgagee's interests. Parties’ arguments: Ward (mortgagor) commenced proceedings in 2023 seeking a discharge of the mortgage, arguing...