O on the contrary in sinclair v hope investments the

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o On the contrary in Sinclair v Hope Investments – the opposite was held. Jacobs v Platt – Dr Jacobs obtained an option to purchase for a price of 16m. The option gave her 45 days to exercise it. She paid a half million dollars on grant of the option. Held that the option to purchase gave rise to a contingent equitable interest from the time that the option was taken out. Swanston Mortgage Facts: Mortgagee exercise power of sale. Allegation that it was sold undervalue. Transfer to the purchaser had been executed but remain unregistered because the mortgagor had tried to caveat and the registrar had refused to register it. The registrar did not believe that it was not a caveatable interest. Brooking J: Looked at Latec . Looked at Snell for a definition for equity and discovered 4 different possibilities for the word equity (equitable interest, mere equity, floating equity – mere expectancy, right to equitable remedy not proprietary in nature). In Latec there was competition between a defrauded mortgagor. The purchaser was registered. An equitable charge had been taken over the land by MLC. The approaches in Latec differed between the judges. Kitto J – mortgagors right was a mere equity. Taylor J – mortgagor’s right was a full equitable interest but it would be postponed on the basis of the discretion of the court. Menzies J – if the equity was made good would retrospectively be an equitable interest. For priority disputes –it was a mere equity. Brooking J argues that Kitto’s approach equates the right to set aside is a mere equity which is not caveatable. Crampton v French – Does not have to be a registrable interest Facts: Borrowers made an agreement with lender that the lender can caveat if there is default. Lender argued that there was an equitable charge by implication. The borrower argued that the clause was void. The borrower argued that the clause did no create a caveatable interest. Held: If all that existed was the agreement there was no caveatable interest. 41
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Priority Disputes between Equitable Interests 1. Moffett v Dillon – Test 2. Merits test – Rice v Rice, Abigail, Heid v Reliance Notice Test – an attempt to simplify things. Moffett v Dillon (1999) Facts: Brooking J: Said that in addition to the merits test there is an independent test known as the notice test. This test means that the first equitable interest must prevail if the second equitable interest took with notice of the 1 st existence. If there was such notice there is no need to look at the merits test. This test is based on the fact that there were no cases where the second equitable interest with notice prevailed over the earlier interest. If the second has notice and goes ahead then they are the author of their own problem (P Butt). Exceptional circumstances: Where the second party had been induced to believe that the first interest did not exist or would not be enforced (Cth v Platzer).
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