Creasy's Grain Enterprises Pty Ltd v Clarke & Barwood Lawyers Colac Ltd

Creasy's Grain Enterprises Pty Ltd (the Mortgagor) commenced proceedings against Clarke & Barwood Lawyers Colac Ltd (the Second Mortgagee) seeking a declaration that it had priority over the Second Mortgagee's interest in a property. The Mortgagor held a first mortgage over the property which was later assigned to a third party, the First Mortgagee. The First Mortgagee then created a second mortgage over the property and assigned it to the Second Mortgagee. The dispute centred on whether the three mortgages were cross-linked, the meaning of the "all moneys" clause in the mortgages, and the position of the Second Mortgagee if the mortgages were cross-linked. The case was heard in the Supreme Court of Victoria. The court was required to decide if the three mortgages were cross-linked, and if so, what the implications were for the Second Mortgagee. The court also needed to interpret the "all moneys" clause in the mortgages and determine the position of the Second Mortgagee if the mortgages were cross-linked.

The court found that the three mortgages were cross-linked, as the First Mortgagee had a direct interest in the property at the time the second mortgage was created. The court held that the "all moneys" clause in the mortgages meant that the Second Mortgagee could only enforce the second mortgage if the Mortgagor defaulted on both mortgages. The court also found that if the mortgages were cross-linked, the Second Mortgagee would be subordinate to the Mortgagor's interest in the property. The court held that Section 87 of the Transfer of Land Act 1958 did not apply to cross-linked mortgages.

The court declared that the Second Mortgagee's interest in the property was subordinate to the Mortgagor's interest. The court also ordered the Second Mortgagee to pay the Mortgagor's costs of the proceeding. This decision highlights the importance of understanding the implications of cross-linked mortgages and the meaning of the "all moneys" clause in mortgages. It also demonstrates the court's willingness to interpret legislation to achieve a just outcome in a dispute between parties.