Circuit Finance Pty Limted v Wills

The dispute in Circuit Finance Pty Limited v Wills involved Circuit Finance, a finance company, and Wills, a borrower. The matter was heard in the Federal Court of Australia. The primary issue at hand was the determination of the priority between competing equitable interests in a property, specifically whether the registration of a mortgage subsequent to the creation of an earlier equitable charge could affect the priority of the interests.

The court had to decide whether the registration of a mortgage, which was executed under one charge but registered later than another charge, could alter the priority between the interests created by those charges. The case centred on an express agreement between the parties that the registration of the mortgage would not affect the priority of their respective interests. The court was tasked with interpreting the effect of such registration on the established priority between the interests, given the express agreement.

In its reasoning, the court held that the express agreement between the parties regarding the priority of their interests had to be respected, regardless of the registration of the mortgage. The court found that the registration of the mortgage did not alter the priority established by the earlier equitable charge, as per the express agreement. Consequently, the court ruled in favour of the party with the earlier equitable charge, affirming that the registration of the subsequent mortgage did not affect the priority of their interest.

The final orders of the court reflected its determination that the registration of the subsequent mortgage did not impact the priority of the earlier equitable charge. The court ordered the payment of any surplus proceeds from the sale of the property in accordance with the priority of the interests, favouring the party with the earlier equitable charge.