Three different parties claimed competing equitable interests in land, namely a builder, a lender and a purchaser, which arose in that order and all three lodged caveats but in the order of the lender, the purchaser and the builder. All three sought declarations as to validity and primacy of their interests. The registered mortgagee obtained possession of the property.
The court found all of the equitable interests valid. The general principle applicable to competing equitable interests is that where the merits are equal, priority in time of creation gives the better equity. However, priority will be accorded to the later interest if the merits are unequal, as for instance where the owner of the later interest is led by the conduct of the owner of the earlier interest to acquire the interest in the belief that the earlier interest did not then exist. The court found that the failure of the builder to lodge a caveat did not amount to postponing conduct since the later interests were acquired without first searching the register. The court also found that the lender did not take advantage of the purchaser who failed to attend a meeting by proceeding with the execution of its documents, so acquiring it’s interest ahead of the purchaser, because the purchaser was proceeding regardless. The court found priority determined by the order in which the interests were created.
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