National Australia Bank Ltd v M.C.M.C. Pty Ltd

The Supreme Court of Western Australia was asked to consider an application by the National Australia Bank Ltd (the plaintiff) to remove a caveat from a property in North Perth. The first defendant, M.C.M.C. Pty Ltd, had lodged the caveat against the property, which was already subject to a registered mortgage held by the plaintiff. The central issue in the case was whether the plaintiff had actual or constructive notice of the first defendant's intention to take an equitable mortgage over the property, and if so, whether this would affect the priority of the plaintiff's registered mortgage. The court found that the plaintiff had not been given actual notice of the first defendant's equitable mortgage and that lodging a caveat does not constitute constructive notice to a registered mortgagee. The court also determined that the balance of convenience favoured the removal of the caveat, as the plaintiff's proposal to protect the first defendant's equitable interest while allowing the property to be sold offered the best resolution. The court ordered the caveat to be removed, subject to the plaintiff providing a formal undertaking and the initiation of litigation to resolve the priority dispute without delay.