Subsection 99(2) of the Property Law Act–selling through security

Subsection 99(2) of the Property Law Act 1974 (Qld) (PLA) confers a wide discretion on the court to direct the sale of secured property.

Such an order may be made even where the holder of the security opposes the sale.

This subsection has utility because it enables liquidators, for example, to sell secured property of the company in liquidation notwithstanding the opposition of a secured creditor to the sale. This is relevant because, while receivers and managers can apply to the court under section 420B of the Corporations Act 2001 (Cth) for an order to sell secured property, as was addressed last month, there is no equivalent provision in the Corporations Act that a liquidator can rely upon for the same purpose.

Subsection 99(2)

Subsection 99(2) of the PLA provides:

“In any action, whether for foreclosure, or for redemption, or for sale, or for the raising and payment in any manner of mortgage money, the court, on the request of the mortgagee, or of any person interested either in the mortgage money or in the right of redemption, and, even though—

(a) any other person dissents; or


(b) the mortgagee or any person so interested does not appear in the action;

and without allowing any time for redemption or for payment of any mortgaged money, may direct a sale of the mortgaged property, on such terms, subject to subsection (3), as it thinks fit, including the deposit in court of a reasonable sum fixed by the court to meet the expenses of sale and to secure performance of the terms.”

What is required

Having regard to the terms of the subsection, the court may only make an order if it is satisfied that:

  • The applicant has standing to bring the application. An applicant will have standing if it is the mortgagee or is interested in either the mortgage money or in the right of redemption.
  • The application is made within “any action”. This requirement will be satisfied if, for example, proceedings are commenced by originating application for an order that the property be sold.1
  • The application is in respect of property. Section 99 applies not only to real property, but also extends to property generally.2 Section 36 and schedule 1 to the Acts Interpretation Act 1954 (Qld) defines ‘property’ as meaning any legal or equitable estate or interest (whether present or future, vested or contingent, or tangible or intangible) in real or personal property of any description (including money), and includes things in action.
  • The application is in respect of “mortgaged property”. ‘Mortgage’ is defined in the Dictionary in Schedule 6 of the PLA to include a charge on any property for securing money or money’s worth.3 For example, in Hanson Construction Materials Pty Ltd v Davey (2010) 79 ACSR 668; [2010] QCA 246, it was decided that subsection 99(2) empowers the court to order the sale of land the subject of an equitable charge to satisfy a debt secured by the charge.4

It has been said, in the context of an application under section 99(2), that the PLA is “a remedial statute and should not be construed to limit the reforms it brought to the law of property”.5

Subsection 99(2) of the PLA grants a wide discretion to the court.6 The discretion is unfettered other than by the inherent and implied obligation to exercise the power judicially.7 It enables an order for sale of the property to be made, for example, notwithstanding that a secured creditor opposes the order and the sale will not realise sufficient funds to pay out the secured creditor.8

The discretion must be exercised having due regard to the interests of all concerned. Those interests would include those of a secured party, such as a mortgagee, which is talking active steps to obtain possession and enforce its security by sale.9 Such circumstances could be a strong reason not to grant the relief sought.10


Obtaining an order in practice

An application should generally be commenced by filing an originating application. Any person, or company, affected by the orders should be joined as a party.

In general terms, the following evidence should be considered:

  • evidence as to the property to be sold
  • evidence of the security or mortgage over the property. In respect of real property, this might be a copy of the mortgage. In respect of personal property, this will include any financing statement registered on the Personal Property Securities Register. Evidence of the underlying loan and security documents should also be adduced.
  • an expert valuation of the property and the details of any sale campaign which has taken place or which is proposed to take place. If a buyer has already been found, the sale campaign (and proposed sale price) may be the subject of close consideration by the court.
  • evidence as to why it is necessary to sell the property, including evidence as to the impact on interested parties if the property is, or is not, sold.

Terms of order

Subsection 99(2) confers a broad power on the court to make an order of the type discussed above on such terms as it seems fit.

Subsection 99(7) also provides that the court may, in favour of a purchaser, make an order vesting the mortgaged property, or appoint a person to convey the property, subject or not to any encumbrance, as the court may think fit or, in the case of an equitable mortgage, may create and vest a legal estate in the mortgagee to enable the mortgagee to carry out the sale as if the mortgage had been made by deed or instrument by way of legal mortgage.

When considering the orders to be sought, the applicant should consider whether to seek an order vesting the property in a person and other practical matters such as how the property will be sold and how the proceeds of sale should be distributed.

If a person is in possession of the property, the orders should provide for that person to deliver up vacant possession.


If security over the property needs to be released to enable the sale to proceed, the proposed orders should include a direction that the party which has the security be required to execute the relevant documents so as to release their security (for example).

An applicant should also consider including orders that protect the interests of the secured creditor. In some, but not all cases, the court may require the applicant to provide security or set a reserve price for the sale of the property.

Kylie Downes QC is a member of Northbank Chambers and the editorial committee of Proctor. Andrew Schriiffer is a Brisbane barrister and associate member of Northbank Chambers. The third edition of the Back to Basics book is now available.

1 Moreton Resources Ltd (in liq) v First Samuel Ltd [2020] QSC 339 at [110].
2 Section 77A(1)(c) of the PLA provides that Part 7 (which includes section 99) applies, subject to any other Act, “to any other mortgage whether of land or any other property.” (emphasis added) See also Moreton Resources Ltd (in liq) v First Samuel Ltd [2020] QSC 339 at [110].
3 See also Worrell v Issitch [2001] 1 Qd R 570; [2000] QSC 146.
4 See also Worrell v Issitch [2001] 1 Qd R 570; [2000] QSC 146; Phillips v Hogg [2001] QSC 390.
5 Hanson Construction Materials Pty Ltd v Davey (2010) 79 ACSR 668 at 682 [57].
6 Asset Core Pty Ltd v Jarrett 1 Enterprises Pty Ltd [2015] QSC 270; [2016] 1 Qd R 379 at 382-384, [19]-[25].
7 Palk and Ors v Mortgage Services Funding Plc [1993] Ch 330(CA) per Sir Michael Kerr at 341-342, quoted in Asset Core Pty Ltd v Jarrett 1 Enterprises Pty Ltd [2015] QSC 270; [2016] 1 Qd R 379 at 383, [23].
8 See, for example, Asset Core Pty Ltd v Jarrett 1 Enterprises Pty Ltd [2015] QSC 270; [2016] 1 Qd R 379 at 382-384, [21]-[24].
9 Moreton Resources Ltd (in liq) v First Samuel Ltd [2020] QSC 339 at [123] and [137].
10 Compare Moreton Resources Ltd (in liq) v First Samuel Ltd [2020] QSC 339 at [143].

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