Re AMP Bank Ltd

The matter before the court involved AMP Bank Ltd as the respondent and involved an application by the respondent to enforce a purchaser's lien over property. The dispute arose from a contract for the sale of land, where the respondent sought to exercise a lien over the property following the rescission of the contract by the vendor. The court had to determine whether the respondent's lien was enforceable against a prior equitable interest held by the vendor, which was created by agreement with a third party.

The central legal issue was whether the respondent's purchaser's lien could be exercised over the property despite the existence of a prior equitable interest held by the vendor. This interest was created by an agreement with a third party and had not been protected by the lodging of a caveat. The court had to consider whether the failure to lodge a caveat should result in the prior equitable interest being postponed to the respondent's lien.

The court held that the respondent's purchaser's lien was not enforceable over the property because the vendor held a prior equitable interest that was not subject to being postponed by reason of the failure to lodge a caveat. The court found that the creation of the prior equitable interest was a deliberate act of the vendor, who had full knowledge of the third party's interest and had expressly agreed to it. The court emphasised that the equitable doctrine of notice required the respondent to take account of the prior equitable interest when exercising its lien. The court concluded that the respondent's purchaser's lien was subordinate to the prior equitable interest held by the vendor. The court ordered that the respondent's application to enforce the purchaser's lien be dismissed.