3 failure to caveat is not postponing conduct per se

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3. Failure to caveat is not postponing conduct per se. There must be other circumstances, which make it inequitable that the first interest should prevail. Depends on whether conduct of original title holder misled second interest holder into thinking they weren’t buying into a conflict. 4. Was there conduct by holder of first interest that contributed to a belief by second interest holder that no such prior interest existed? According to Barwick, NO!!! Breskvar v Wall 1. Name of transferee was left blank, so a dude called Petrie fraudulently added a relo’s name (Wall) into the blank spot. Wall transferred the property to someone, who didn’t register it. 2. Some difference of opinion on HC about the significance of failure to caveat, but all agreed there’d been postponing behaviour. HC treated the Breskvar’s as haaving a full equitable interest. That is, an equity to set aside for fraud. Dispute between this interest and Allban Pty Ltd. 3. Barwick, Owen and Windeyer restated their views in Just Holdings – found other postponing conduct without relying on the Breskvars’ failure to caveat 4. McTiernan, Menzies, Walsh and Gibb considered failure to caveat was relevant to postponing conduct. Heid v Reliance – answered what postponing conduct is. 1. In a transfer to CI, Heid acknowledged that he had been paid in full, although he had a vendor’s lien. He handed the executed transfer and DCT to G (Gibby), an employee of CI. CI registered the transfer and mortgaged to RF (registered finance). Before RF registered its mortgage, H discovered the fraud and claimed priority over RF’s mortgage. 2. All judges thought H should be postponed, and advanced one of two doctrinal justifications: 3. Gibbs CJ, Murphy & Wilson JJ: Heid estopped by his actions from asserting priority over RF’s mortgage Heid’s action was the vendor’s lien, priority over registered mortgage. Holder of prior equity is estopped from asserting priority when they have made a 42
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43 representation by words, conflict, conduct, or omission, and on the reliance of that representation, the later interest holder acts to their detriment in acquiring an interest (here the rep was the signed transfer saying he was paid in full. RF relied on this rep to their detriment). 4. Mason & Deane: It was reasonably foreseeable that H’s actions would lead to a second interest being created in ignorance of his lien. Arming conduct, OR the owner of later interest is led to acquire new interest where it doesn’t exist. Figured that because there isn’t always representation, better to take a broad view in applying the better equity test is, in fairness and in justice, the 1 st interest holder should postponed, and in applying the test, look to see whether there is any relevant act or omission on their part. Once identify the act or omission, then ask, “Was it reasonably foreseeable at the time of that act or omission that a later interest would be created on the assumption that the first interest did not exist?” HAS SOMEONE BEEN MISLED? Close to a negligence test, but not quite.
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