Walton v Blann

In the case of Walton v Blann, the dispute arose between the vendor and purchaser of a property. The vendor had financed the sale of the property and secured the loan with a second mortgage. The contract for sale stipulated that the purchaser was not required to obtain a first mortgage prior to settlement. However, upon settlement, the vendor's mortgage was registered as the first mortgage. Subsequently, the purchaser sought finance from another lender, which was secured by a mortgage on the property. The question before the court was whether the vendor's first mortgagee was required to give priority to the purchaser's subsequent mortgage over the vendor's own mortgage.

The court needed to determine whether the vendor's mortgage, which was registered as the first mortgage, was required to yield priority to the purchaser's subsequent mortgage, given that the purchaser had not obtained the first mortgage as required by the contract. The court considered the legal principles surrounding the priority of mortgages and the effect of the registration of the vendor's mortgage as the first mortgage.

The court held that the vendor's mortgage, registered as the first mortgage, was not required to yield priority to the purchaser's subsequent mortgage. The court found that the contract did not impose an obligation on the purchaser to obtain a first mortgage, and the registration of the vendor's mortgage as the first mortgage did not affect the priority of the mortgage. The court also noted that the purchaser's subsequent mortgage was taken subject to the vendor's first mortgage, and therefore, the vendor's mortgage was entitled to priority.

The court ordered that the vendor's mortgage, registered as the first mortgage, was not required to yield priority to the purchaser's subsequent mortgage. The purchaser's mortgage was taken subject to the vendor's first mortgage, and therefore, the vendor's mortgage was entitled to priority.