The recent WA Supreme Court case of Bunnings v Hanson Construction  considers a competing equities dispute between two suppliers.
The decision serves as an important reminder for businesses who supply goods or services on credit to be aware of the factors courts take into account in determining priorities between equitable interests should the debtor’s assets be insufficient to cover the debts of all creditors.
In a recent judgment a plaintiff with an equitable charge gains the upper hand in a priority dispute. However, due to raising avoidable issues, the Court deducts the unnecessary legal fees.
Morris Finance Pty Ltd v Commonwealth Bank of Australia & Ors  VSC 260 (18 May 2017) highlights the need for a clear legal strategy. Due to not having one the plaintiff had its costs reduced by 25%.
The High Court considered a priority dispute between a liquidator and a secured creditor. In a key decision the liquidator’s claim took priority.
The High Court’s verdict is a good outcome for liquidators. It is however a less welcome result for secured creditors.
Rule Against Tacking vs Expenditure Incurred in Exercising Power of Sale.
In the matter of Matzner v Clyde Securities Ltd  2 NSWLR 293 the Supreme Court considered the issue of competing priorities between three successive mortgagees holding registered mortgages over a single property.
Construction of contractual terms and the concept of priority between secured lenders.
In AET SPV Management Pty Limited v Wildfire Amusements Pty Ltd the court was required to construe an agreement to determine whether a mortgagee had agreed to postpone the priority of its first registered mortgage in favour of another lender.
Priority Dispute – whether a mortgagee surrenders its rights when lodging a proof of debt in respect of its entire claim.
In Combis & Ors v The Trust Company Ltd  QSC 388 the court was asked by the liquidator of a borrower to find that a mortgagee who had discharged its mortgage to allow the security property to be sold by a receiver became disentitled to any share of the surplus sale proceeds because the mortgagee lodged a proof of debt for all monies owed to it.