St George Bank Ltd v McTAGGART

In the matter of St George Bank Ltd v McTaggart, the court was presented with a dispute concerning the priority of a mortgage held by St George Bank Ltd over a property owned by McTaggart. The bank claimed priority over another party that had also issued a mortgage to McTaggart, asserting that its mortgage was secured by "all moneys" and thus took precedence over the later mortgage. The case was heard in the Supreme Court of New South Wales.

The legal issues at the heart of the case revolved around the interpretation of the phrase "all moneys" in the context of mortgages and whether the subsequent mortgagee had sufficient notice of the earlier mortgage. The court was required to determine whether the priority of St George Bank Ltd's mortgage could be preserved under the principles established in Hopkinson v Rolt and whether constructive notice of the earlier mortgage was enough to affect the priority of the subsequent mortgage. The central question was whether the priority of the earlier mortgage could be preserved when the subsequent mortgagee had knowledge of the earlier mortgage, but the facts did not support the application of the "tacking" rule.

The court examined the wording of the earlier mortgage and found that it indeed encompassed "all moneys," thereby extending the security to future loans and monies. The court also considered whether McTaggart, as the mortgagor, had constructive notice of the earlier mortgage at the time the second mortgage was issued. The court concluded that while McTaggart had some knowledge of the earlier mortgage, the facts did not support the application of the "tacking" rule, which would have allowed the second mortgagee to take free of the earlier mortgage. Consequently, St George Bank Ltd was held to have priority over the subsequent mortgagee. The court granted a declaration that St George Bank Ltd had priority over the subsequent mortgage, confirming the security of their position over the property.