Broster v Brueckner

The appeal concerned a dispute arising from an 'off the plan' contract for the purchase of property. The purchasers, Broster and another (the appellants), had paid the full purchase price two years in advance of the property's completion. This payment created a charge over the property. The vendor, Brueckner (the respondent), subsequently entered into a mortgage with a third-party bank, and the bank lodged a caveat over the property. The purchasers sought to have this caveat removed, arguing that the vendor had breached a limited covenant not to encumber the property.

The primary legal issues before the Court of Appeal were whether the trial judge had erred in finding that the purchasers' payment of the purchase price did not create a charge that took priority over the subsequent mortgage, and whether the vendor's actions constituted a breach of the limited covenant. The court also considered whether the purchasers had failed to protect their security interest by not lodging their own caveat.

The Court of Appeal, comprising Meagher, Beazley, and Hodgson JJA, dismissed the appeal. The court reasoned that the purchasers' payment of the purchase price in advance did not, in itself, create a registrable interest in the land that would take priority over a subsequently registered mortgage. The limited covenant was interpreted as not preventing the vendor from granting a mortgage over the property, provided that the purchasers' equitable interest, arising from the charge created by their payment, was not extinguished. The court found no appealable error in the trial judge's findings and concluded that the purchasers had not established a right to have the bank's caveat removed.

The appeal was dismissed with costs.