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because the parties have not complied with the requirements of the common law but have nonetheless
done something that affects rights to the land.
With respect to Torrens Title, all registered mortgages are legal mortgages, but an unregistered mortgage is only equitable because the fundamental requirement of registration has not been complied with.
With respect to common law title, only the first mortgage is a legal mortgage; all others are equitable
only. This is because the land can only be transferred to one mortgagee at a time. If the borrower wishes
to use the land for security with other lenders, the borrower can only mortgage the equitable right to
redeem the property from the first mortgagee.
In the event that there are several mortgages over the one parcel of land and the borrower defaults on them,
there will be several mortgagees competing to exercise their rights over the land. The basic rule is that a legal
mortgage takes priority over an equitable mortgage, and equitable mortgages take priority in order of creation.
J and H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546
The registered proprietor of la...
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- Three '12
- CROWN, native title, National Native Title Tribunal