Land - Mortgage & Adverse Possession (3)

2. Buddy owned two shops in the High Street, one a grocer’s shop and one a baker’s shop. In 1998 he mortgaged the grocer’s shop to Calum (who had a confectioner’s shop) to secure a loan of $20,000. Under the terms of the mortgage Buddy agreed (i) to repay the loan in twenty annual instalments of $2,000 and not otherwise, (ii) not to sell confectionery in either of his shops for the duration of the mortgage, (iii) to sell the grocer’s shop to Calum at a fair valuation if Calum so requested in writing before 2008. Buddy now wishes to know the extent to which he is bound by these terms. He thinks that he can now find a mortgage elsewhere on more favourable terms and he would like to redeem the mortgage.
Advise Buddy.

- (i) can be redeemed, clause void: unconscionable
- (ii) upheld- (iii) void as the clause is not separate or independent to the mortgage terms