The recent case of Condon, in the matter of Rayhill v Australia and New Zealand Banking Group Ltd  FCA 1674 considered the rights of a Bankruptcy Trustee with an equitable lien over mortgaged land. The Trustee claimed that it had standing to sue the mortgagee (ANZ) for a breach of their equitable and statutory duties not to sell the property at less than true value.
ANZ sought an order to summarily dismiss the Trustee’s proceeding on the basis that the Trustee had no reasonable prospect of success, he had no standing and that he had not previously asserted the claim.
The claim required consideration of whether the holder of an equitable lien over real property has standing to bring a claim against the mortgagee for selling the property at less than market value. The Court held that the equitable lien conveys an equitable interest in the property, so there was no merit in ANZ’s contention that the Trustee had no standing to sue them for breach of their equitable duty as mortgagee in possession in selling the property. ANZ’s application for summary dismissal failed.