In Clark v Raymor (Brisbane) Pty Ltd (No 2) [1982] Qd R 790, the dispute centred on the priority of competing equitable interests regarding a piece of land. The Clarks entered into a contract to purchase land from the Sanders, unaware of an earlier equitable charge Raymor (Brisbane) Pty Ltd had against Mr. Sanders' property due to a guarantee he had signed. Despite Raymor's earlier interest, it had not lodged a caveat against the land; therefore, its charge was not discoverable through standard searches. After the Clarks completed the purchase and lodged the transfer for registration, Raymor lodged a caveat before the registration could be finalised, leading to legal contention over priority.
The court held that the priority between competing equitable interests is determined not merely by the order of their creation but by considering the equities of each party. It found that general principles of equitable jurisprudence should be applied, emphasising the conduct and actions of the equity holders concerning their interests. It was highlighted that the earlier in time principle is a matter of last resort and that a more equitable approach involves examining the actions and good faith of the parties involved. Because Raymor failed to lodge a caveat at the time of creating its equitable charge, and given the Clarks' actions were in good faith, including conducting title searches and finalising the purchase without knowledge of the charge, the court ruled in favour of the Clarks’ interest having priority.
The court concluded that Raymor's failure to take steps that could have alerted the Clarks or others to its interest (such as lodging a caveat immediately upon the creation of its charge) resulted in its equitable interest being postponed to that of the Clarks'. Therefore, the appeal by Raymor was dismissed.
From the TLDR Caselaw Archive