Dylan is the registered proprietor of an old house on a large block. Dylan wants to build a substantial extension, so applies to Little Bank for a loan secured by a mortgage. The local manager of Little Bank advances the funds to Dylan, but the paperwork gets lost in a pile on his very messy desk, and he forgets to register the mortgage.
Dylan’s business goes into liquidation and he is unable to make the loan repayments to Little Bank. He tells his mates at the golf club that he is in a bit of financial bother and has given up on the idea of extending the property. Elliot offers to buy the land from him. Dylan decides on the spur of the moment that this is the best way to solve the problem, so he makes a quick sale of the land to Elliot.
Little Bank realises that Dylan has stopped making repayments and wants to sell the land to recover the debt.
With reference to the material covered in this course, and giving reasons for your answers:
This question belongs to business law and discusses about a case study on a bank recovery of funds from a customer.
Total word count: 426
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