McMillan v Dunoon

The case of McMillan v Dunoon involved the plaintiff, McMillan, and the first defendant, Dunoon. The dispute centred on a loan agreement between the parties, which included a clause that McMillan could transfer his property to Dunoon if the loan was not repaid. When McMillan defaulted on the loan, Dunoon lodged a caveat on the property. The plaintiff sought an order to remove the caveat. The matter was heard in the Supreme Court of Victoria. The central legal issue was whether the loan agreement constituted an equitable charge that could be the subject of a caveat. The court needed to determine if the intention to create a security interest could be inferred from the terms of the agreement.

The court examined the nature of the agreement between McMillan and Dunoon. It found that the loan agreement did indeed constitute an equitable charge, as the terms of the agreement demonstrated an intention to create a security interest. The court held that the first defendant had a caveatable interest in the property, and therefore, Dunoon was entitled to maintain the caveat. The court also considered whether the caveat was oppressive or had been maintained for an excessive period but found no grounds for removal on these bases. Consequently, the court dismissed the plaintiff's application to remove the caveat.

The Supreme Court of Victoria found in favour of Dunoon, affirming that the loan agreement constituted an equitable charge that was a caveatable interest. The court concluded that the first defendant was entitled to maintain the caveat on McMillan's property. The plaintiff's application to remove the caveat was dismissed.