Buchanan j agreed with the notice test ormiston j

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Buchanan J: Agreed with the notice test. Ormiston J: Ormiston applied the merits test. If there is notice by the second interest it is just one relevant factor that is weighed up in the merits test. Do you need actual or constructive/implied/imputed notice? It seems that either would do. Actual meets the test. S199 of the PLA imputed knowledge if they would have known upon inquiries or inspections that they reasonably ought to have made. Merits Test – the earlier in time is best Rice v Rice Facts: Michael Rice purchased a leasehold estate from a group of people. In that group were a numbers of Rices. It was assigned to him. He paid one of the vendors the purchase price but did not pay the others their parts. The paper work was put through anyway. M Rice obtained a loan by depositing the deed of assignment (equitable mortgage). M Rice absconded and it became a contest between the unpaid vendors (equitable – vendors lien) and the mortgagees (equitable mortgage). Kindersley VC: If the equitable interests are in all other respects equal priority in time gives the better equity. Time is the last resort. It is immaterial if the matter can be sorted out by relative merits. Nature of interest Manner of acquisition Conduct of the parties (ALWAYS) He did not need to rely it on the prior in time rule because he could split it on the basis of who had the better equity. Abigail v Lapin and Heid v Reliance suggest that primacy in time should be given to the earlier in time. Rodrick suggests that it reverts the onus of proof. But it is reverted again by Deane and Mason in Heid v Reliance. 42
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Three factors that indicate postponing conduct (not fatal): Was there a caveat? Was there possession of the CoT? Did somebody have possession of the land? Second interest holder: Title search (for caveat)? Did they inspect the land? Butler v Fairclough Facts: Prior equitable charge. Had not caveated. High Court held that the prior equitable chargee had been postponed to the subsequent purchaser. Held: In first in time all other things being equal is entitled to priority. Postponing conduct will mean that things are not equal. If there is an equitable mortgagee allowing the mortgagor to retain the title deeds there is postponing conduct. Spoke about caveats. A caveat operates as notice to the world that title is subject to the equitable interest alleged in the caveat. Abigail v Lapin Facts: Lapins executed two transfers. In truth she was lending them money and was meant to hold on to the title deeds until she was repaid. After becoming the RP. She borrowed money from Abigail – got a memo a mortgage in registrable form. Abigail caveated his merits and later tried to lodge the mortgage for registration. The Lapins lodged a caveat.
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