Gibbs cj applied the test in rice if they are unequal

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Gibbs CJ: Applied the test in Rice. If they are unequal interests go to time. Look to conduct leading to a belief that the earlier interest does not exist. Looks and Rice and Abigail. May be explained by (1) agency theory or (2) estoppel theory. The fact that when you give the deeds you cannot rely on the restrictions that you put on your agent as against an innocent third party that comes along. An assumption was created by Heid’s conduct. Heid should be bound. Mason and Deane JJ: Depends on the facts which test works best. Applied Rice. Can you rely on estoppel theory without direct representation. Although the 1 st interest holders conduct may be blameworthy but that is not enough. Prefer a flexible (or negligence) approach. They say that you may use estoppel or negligence theory. It is not enough to simply have a causal nexus you must also have a reasonably foreseeable consequence of your acts. Here there was a risk of deception. That risk was RF when they gave the documents to Conells employee. Factors: 1. Caveats a. Have been held to be important. Their importance has varied. b. In recent times the importance of caveating has decreased. c. Where prices of land are rising a vendor could be tempted to forget abour a K of sale and sell again. If the first purchaser caveats there is no issue. Caveats by purchasers are rare (only 5% caveat). d. (Osmonoski v Rose – 1 st purchaser was postponed because the 2 nd purchaser relied on an absence of a caveat). e. Butler v Fairclough – caveats operate as notice to the world. f. Abigail v Lapin – failure to caveat was important and was part of the postponing conduct. 44
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g. Backstep in importance of caveats: Jacobs v Platt (failure to caveat because it was her parents). J & H Just Holdings (bank of NSW did not caveat) – purpose of a caveat is not to give notice to the world (though it might do so) – Barwick CJ. Windeyer – failure to caveat is not fatal. 2. Possession of the CoT a. Rice v Rice – vendors lien v equitable mortagee (with title deeds). Possession of title deeds gives the better equity. b. In a dispute between 2 equitable mortgagees it will be relevant. It is reasonable to expect a subsequent mortgagee to obtain the paper title (or at least ask for it). c. Butler v Fairclough – the fact that you let go of title deeds is postponing conduct in the case of a 2 nd mortgagee. (J & H Just agrees). 3. Possession of land a. If someone in a constructive trust is occupying the land it can be relevant because you would expect the 2 nd interest holder to inspect the land. LOOK AT THEORIES AFTER THE THREE QUESTIONS Agency Theory: If you arm someone you hold them out as giving them authority to act. You are bound by what they do within apparent authority. Abigail v Lapin (Privy Council) – it is not a representation made directly to Abigail.
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