Supreme Court New South Wales Medium Neutral Citation: Westpac Banking Corporation [2015] NSWSC 869 Hearing dates: 19 June 2015 Date of orders: 03 July 2015 Decision date: 03 July 2015 Jurisdiction: Common Law Before: Robb J Decision: No orders made. Refer to [46] and [47]. Catchwords: PROCEDURE – funds paid into Court by plaintiff mortgagee – funds represent surplus proceeds after mortgagee sale of property – two applications for payment out of Court – two competing equitable interests in land – first notice of motion adjourned and second notice of motion heard – whether applicant entitled to funds on the basis of a charge over the property sold – registered proprietors of property not named as parties to deed – signed deed as directors/secretary – whether registered proprietors parties – proper construction of deed – registered proprietors parties to deed – guaranteed repayment by debtor – despite ambiguity, the deed allowed applicant to lodge a caveat over the property – deed allowed applicant to create a charge over property by lodgement of the caveat – the issue of priority between the two competing interests must be determined – hearing of both notices of motion to be relisted for balance of issues to be determined Legislation Cited: Trustee Act 1925 (NSW) Cases Cited: Bond v Rees Corporate Advisory Pty Ltd [2013] VSCA 13 Bondi Beach Astra Retirement Village Pty Ltd v Hohman [2010] NSWSC 260 Coleman v Bone (1996) 9 BPR 16,235 Iaconis v Laza [2007] NSWSC 1103; (2007) 13 BPR 24,937 Murphy v Wright (1992) 5 BPR 11,734; BC920350 Padstow Corporation Pty Ltd v Fleming (No 2) [2011] NSWSC 1572; (2011) 86 ACSR 636 Redglove Projects Pty Ltd v Ngunnawal Local Aboriginal Land Council [2004] NSWSC 880; (2004) 12 BPR 22,319 Taleb v National Australia Bank [2011] NSWSC 1562; (2011) 82 NSWLR 489 Troncone v Aliperti (1994) 6 BPR 13,291; BC9402483 Category: Consequential orders (other than Costs) Parties: Westpac Banking Corporation (plaintiff) David Wai (applicant – motion filed 19.5.15) Somy Ros (first applicant – motion filed 14.5.15) Brian Kelly (second applicant – motion filed 14.5.15) David Wai (first respondent – motion filed 14.5.15) Regina Thei (second respondent – motion filed 14.5.15) Brett Firman (third respondent – motion filed 14.5.15) Representation: Counsel: Amy Knox (applicant motion filed 14.5.15) M Bennett (applicant on motion filed 19.5.15) Solicitors: Tresscox Lawyers (applicant – motion filed 14.5.15) Cordato Partners Lawyers (applicant – motion filed 19.5.15) File Number(s): 2015/103252 Publication restriction: None Judgment 1. By a summons filed on 8 April 2015, Westpac Banking Corporation paid into Court $59,053.63 pursuant to s 98 of the Trustee Act 1925 (NSW). 2. That amount represented the surplus after Westpac sold the property known as 14/26-34 McElhone Street, Woolloomooloo (the Property) under a registered mortgage granted to it by the registered proprietors of the Property, Regina Sonari Thei and Brett James Firman, after payment of all monies due to Westpac under the mortgage. 3. There were before the Court two notices of motion that sought payment of the funds in Court out to the applicants. 4. One of the notices of motion was filed by Dr David Wai on 19 May 2015. The other notice of motion was filed on 14 May 2015 by Somy Ros and Brian Kelly. 5. The applicants each claimed an entitlement to the surplus funds on the basis that they had a security interest in the Property that ranked after the mortgage to Westpac. 6. Ms Ros and Mr Kelly challenged Dr Wai's claim that he was entitled to the equitable security over the Property that he claimed. 7. Initially it was proposed that the Court would determine both notices of motion by a hearing in the Applications List. However, Dr Wai informed Ms Ros and Mr Kelly that he would object to their evidence that they paid the money they say constituted the loan that was secured by the equitable mortgage granted to them over the Property. Ms Ros and Mr Kelly were not in a position to prosecute their notice of motion in these circumstances, and the hearing of their motion was adjourned. 8. In these events, the Court has only heard Dr Wai's notice of motion. 9. Dr Wai's claim arises out of a loan of $100,000 that Dr Wai advanced to a company called Wholesum Investments Pty Ltd (Wholesum) under a deed dated 31 August 2010, called the Investor Agreement. 10. The purpose of the Investor Agreement was to assist Wholesum to undertake the development of a block of 6 units located at 275 Avoca Street, Randwick. Wholesum has since been deregistered. 11. Dr Wai understood that, at the time, the directors of Wholesum were Ms Thei and Mr Firman, who were the registered proprietors of the Property. It appears, however, from the records maintained by ASIC, that Mr Firman ceased to be a director of Wholesum on 1 August 2010. 12. Dr Wai's evidence was that a person named Fred Klein acted as an intermediary between Dr Wai and Wholesum, for the purpose of negotiating the advance. Dr Wai understood that Mr Klein was the company's accountant, and also that he did Ms Thei's and Mr Firman's personal taxes. 13. Initially, Dr Wai was disinclined to make any investment in relation to the development of the property at Randwick, because he thought it was too risky. In the course of discussions with Mr Klein, Dr Wai said that he would need personal guarantees from Ms Thei and Mr Firman, a high interest rate of 25% per annum; and the advance would need to be secured by caveat over their personal property, and the loan would only be for a very short term of four months. 14. Dr Wai repeated that statement at a meeting that he had on 26 June 2010 that he attended with Ms Thei, Mr Firman and Mr Klein. Dr Wai said that Ms Thei and Mr Firman responded by agreeing to personally guarantee the loan, and to grant a security over the Property. 15. Dr Wai relied upon an email that he wrote on 28 June 2010 to two persons with whom he was apparently discussing the commercial prospects of success of the proposed development. The email includes the statement: "[Mr Klein] is getting caveats and personal guarantees over the developers, to reassure me". 16. The Investor Agreement dated 31 August 2010 was expressed to be between Wholesum, described as "Developer", and Dr Wai, described as "Investor". Mrs Thei and Mr Firman were not stated to be parties. 17. Under clause 4 of the Investor Agreement, Dr Wai agreed to pay the sum of $100,000 to Wholesum on the date of the agreement, to be used by Wholesum "for the purpose of the project related expenses". 18. Under clause 5, Wholesum was entitled to any profit received by it on completion of the project, but it was obliged to pay to Dr Wai, after completion of the project, an amount described in clause 5.1 as the "Investors Interest". The Investors Interest was explained in schedule 2. Schedule 2 set out three scenarios as to how the development would take place. It also set out three estimates of projected profit; one for each scenario. The estimated project profit increased from one scenario to the next. There is a column in schedule 2 called "investors interest rate". The rate is stated as being 25% for each scenario. The final column is called "investors estimated project profit" based upon the particular investment. That column is blank. 19. Clause 7 is headed Risk, and provided as follows: 7.1. The Investor acknowledges that, notwithstanding any other provision of this agreement; (a) The Investor Finance constitutes a debt owing by the Developer to the Investor. (b) If the Project suffers a loss and there is no profit the Developer will be liable to repay the Investor Finance to the Investor & any interest that the Investor has earned from date of the investment funds being received. (c) The Developer guarantees to repay the Investor Finance to the Investor. 1. Clause 22 is entitled Caveat and provided: 22.1. The Developer grants permission to the Investor to lodge a caveat for registration in respect of the a (sic) property that is owned by the Developers located at 14/26-34 McElhlone Street, Woolloomooloo NSW; Granting of lodgement of such caveat will only be allowed in the event that any or all of the following occur (a) Should the maturity date being 4 months from the date of this agreement lapse and the Investor has not received their full investment in addition to all the interest earned. (b) The Investor has not received their initial investment or the interest earned within 1 month of the Completion date of the Project. 1. The Investor Agreement was expressed to be a deed. It was signed by Ms Thei and Mr Firman on behalf of Wholesum as "Director/Secretary". Dr Wai also executed the document. 2. Dr Wai also executed a redeemable preference share subscription agreement with Wholesum, dated 15 August 2010. Under the agreement Wholesum would, in consideration of the payment of $100,000, issue 100,000 class A redeemable preference shares to Dr Wai. The maturity date for the redeemable preference shares was expressed to be 4 months from the date of issue. The shares were to be redeemed at the original value plus a dividend, being 25% of the subscription price. 3. Dr Wai simply annexed the redeemable preference share subscription agreement to his affidavit, together with the Investor Agreement. He described the Investor Agreement and the redeemable preference share subscription agreement together as simply being "a copy of the Investor Agreement" that he signed. The evidence did not explain whether the redeemable preference share subscription agreement was implemented. The significance of that agreement is unclear. 4. Ms Ros and Mr Kelly did not challenge any of the evidence given by Dr Wai. Their position was that the Investor Agreement between Dr Wai and Wholesum did not have the effect of creating a charge in favour of Dr Wai over the Property. That was primarily because the registered proprietors of the Property were not parties to the Investor Agreement, and because, on its proper construction, clause 22 did not create a charge over the Property. 5. The Investor Agreement clearly defines Wholesum as the Developer. In addition, the only party other than Dr Wai who appears to have executed the Investor Agreement was Wholesum. It would ordinarily be appropriate to find that Ms Thei and Mr Firman were not parties to the deed, and they did not undertake any obligations, or create any interest in the Property under it. 6. However, there is authority for the proposition that, if on the proper construction of a document that appears only to have been executed by a company, in circumstances where the directors sign the agreement in the usual way, the directors may also be parties to the agreement, and bound by it, if in fact that was the intention of the parties: See Padstow Corporation Pty Ltd v Fleming (No 2) [2011] NSWSC 1572; (2011) 86 ACSR 636 per Gzell J at [12] to [22]. I refer in particular to the following extract from his Honour's judgment: [18] In Scottish Amicable Life Assurance Society v Reg Austin Insurances Pty Ltd (1985) 9 ACLR 909 (Scottish Amicable Life) the appellant agreed to the appointment of a company as agent but said that it would require personal guarantees from the directors. The directors attested the affixation of the common seal of the company to the agency agreement. The common seal was again affixed in the presence of the directors to the indemnity provision. [19] Mahoney JA cited the passage from Delaney with approval and said that what the directors did was an authentication of the document as their document and although they took part in the execution of the document by the company, their signatures provided sufficient authentication. [20] McHugh JA rejected the dictum of Atkin LJ in Ariadne Steamship that one could not go beyond the qualification to a signature as, for example, "on behalf of". His Honour took the view that the contents of a document and surrounding circumstances might indicate that a signatory was bound even though a qualification attached to his signature. At 923–4 his Honour said: But if that dictum is correct I think it should be confined to the special case of the agent who signs for an undisclosed principal. It cannot be accepted as applicable in all cases. In some cases the contents of a document may indicate that the signatory is bound even though a qualification attaches to his signature. Expressly or by implication the body of the document may make it plain that the signatory is a party to the contract. In the examples given by Atkin LJ, it would usually follow that there was no liability on the part of the person signing. But this is because the express disavowal of responsibility in those examples is so strong that no other consideration, based on the terms of the document, can overcome it. In other cases, however, the qualification to the signature may be overcome by the terms of the document and the surrounding circumstances. In the end the decision must depend upon the terms of the document including the qualification attaching to the signature together with the surrounding circumstances. [21] The decision in Cheung was doubted and not followed in Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd (1989) 21 NSWLR 160 (Clark Equipment). In that case it was held that signatures to a factoring agreement did not bind the signatories as guarantors. Giles J rejected the dictum of Atkin LJ in Ariadne Steamshipat 174 and said: In the result, I conclude that the proper approach is to inquire whether there is to be found an intention that the signatory be personally bound to the contract evidenced in the document, meaning thereby not a subjective intention but an intention to be found objectively, notwithstanding a qualification attached to the signature. That intention, or lack thereof, is to be found upon the construction of the document as a whole, including but not being limited to the qualification attached to the signature, in light of the surrounding circumstances to the extent to which evidence thereof is permissible. The inquiry is not limited to consideration of the signature and its qualification in order to determine whether or not the signature indicates an assent to be personally bound. 1. The Victorian Court of Appeal also accepted the statements of principle made by McHugh JA (as his Honour then was) and Giles J (as his Honour then was) in Bond v Rees Corporate Advisory Pty Ltd [2013] VSCA 13 at [57] to [59]. 2. I have noted the submission made on behalf of Ms Ros and Mr Kelly that the facts in Padstow were different, and perhaps clearer, than the present case, in that the lease in that case, although not apparently signed by the guarantor, contained a clause that stated that the guarantee provisions in the lease were to apply if the guarantor was named in the schedule to the lease, and the schedule contained an item that clearly identified the defendant as the intended guarantor. 3. In the present case, clause 22 expressly grants to Dr Wai a right to lodge a caveat over the Property. Wholesum had no interest in the Property. The only parties who could authorise any other party to lodge a caveat against the title to the Property were Ms Thei and Mr Firman. That is an indication that Ms Thei and Mr Firman intended to grant that right. 4. That conclusion is supported by the strange circumstance that, in the chapeau to clause 22.1, where it first appears, the word "Developer" is used, and where it secondly appears, the word "Developers" (plural) is used. The use of the singular and the plural in the chapeau is inconsistent. The use of the plural may only be a typographical error, in what is an inexpertly typed document. However, it was the case that the two persons who signed the deed on behalf of Wholesum were the registered proprietors of the Property. It cannot be ruled out that the use of the plural was intentional. In any event, the use of the plural introduces an element of ambiguity into the wording of the deed. 5. At the hearing of his notice of motion, Dr Wai did not specifically rely upon a claim that, if the Investor Agreement did not grant him a valid right to lodge a caveat against the title to the Property that bound Ms Thei and Mr Firman, he was entitled to have the deed rectified, because the prior oral agreement that he reached with Ms Thei and Mr Firman was that they would guarantee the debt of Wholesum, and grant him a right to lodge a caveat over the title to the Property. Nor did he put an argument that the inclusion in the Investor Agreement of clause 22 had the effect that the deed was highly ambiguous, so that the Court should construe the deed having regard to parole evidence of what the parties intended. That is likely to have been a result of the summary way that parties are encouraged to approach applications for payment to them of money paid into Court under section 98 of the Trustee Act, when those applications are dealt with in the Applications List. 6. In the present case, I think it is legitimate for the Court to take into account the fact that the evidence establishes that the Investor Deed was apparently prepared by Mr Klein, who was not legally qualified, and it was intended to put into effect the oral agreement that was reached between Dr Wai and Ms Thei and Mr Firman. 7. This conclusion finds some support in the terms of clause 7 of the Investor Agreement. While, in the ordinary case, it would be appropriate to construe the deed on the basis that Wholesum was the only Developer, because that is the way the term Developer is defined, there are indications in the wording of the deed, which is not clearly drawn, that suggests that the parties probably intended to use the expression Developer to refer to Wholesum on the one hand, and Ms Thei and Mr Firman on the other, interchangeably. 8. Clause 7.1(b) contains an obligation on the "Developer" to repay the Investor Finance, even if the project suffers a loss and there is no profit. Given that provision, it must be asked why clause 7.1(c) whereby: "The Developer guarantees to repay the Investor Finance to the Investor" was also necessary. The existence in clause 7 of both an obligation to repay the debt, and a separate guarantee of repayment, suggests on balance that in clause 7.1(c), "Developer" was intended to refer to Ms Thei and Mr Firman, and to create a guarantee on their part that Dr Wai would be repaid the amount payable under the Investor Agreement. 9. The wording of the Investor Agreement is plainly ambiguous and unclear, but in the light of the earlier oral agreement, and the inclusion of clause 7.1(c) and clause 22, I have concluded that the proper construction of the Investor Agreement is that it included a guarantee by Ms Thei and Mr Firman, and also a grant by them to Dr Wai of the right to lodge a caveat against the title to the Property on the terms set out in clause 22. 10. The next question is, in view of the unclear wording of the Investor Agreement, did it create a charge over the Property in favour of Dr Wai? 11. Although the Investor Agreement was made on 31 August 2010, a caveat was not immediately lodged against the title to the Property. Dr Wai gave evidence that he was told by Mr Klein on numerous occasions that Ms Thei and Mr Firman were taking steps to lodge the caveat. However, after some time he learned that the caveat had not been lodged, and on 11 October 2011 he caused his solicitors to lodge a caveat in which he claimed an "equitable estate and interest" in the Property under the Investor Agreement. 12. In Murphy v Wright (1992) 5 BPR 11,734; BC920350, Handley JA (with whom Priestley JA agreed; Sheller JA dissenting) held that the twelfth clause in the document in question in that case conferred upon the lender an option that could be exercised on default, for the lender to attach the debt to any one of the guarantors' assets, and which could be exercised by lodging a caveat against the property. The act of lodgement by the lender created an equitable charge over the property. 13. The term of the agreement that was considered by the Court of Appeal was in the following terms: "Twelfthly – In the event of default by the Borrowers in payment of monies due under the Security Documents or in performance or observance of any covenants therein then the Lender shall in addition to the rights set out herein or in the Security Documents be entitled to attach the debt due to any of the assets of the Guarantor or Guarantors whether such assets be real or personal and further that the parties hereto agree that in the event of such default the Lender may register a caveat against any property registered in the name of any or all of the Guarantors until the Monies Secured are repaid." 1. Handley JA said at BC9203050 p 6 to 10: S74F(1) of the Real Property Act enables a person who claims to be entitled to an estate or interest in any land to lodge a caveat against the title. A registered proprietor cannot by contract confer a right to lodge a caveat where no caveatable interest exists. See Tooth & Co Ltd v Barker (1960) 77 WN (NSW) 231 at 233, 242-3. If the clause only confers a contractual right it will be ineffective. However the existence of this right suggests that the Lender was intended to have an equitable charge which would support a caveat. … The principle that the exercise by a creditor of a contractual authority from a debtor can create or alter a security interest over property of the debtor is a familiar one. The conversion of a floating into a fixed charge by its crystallisation is one example. The creditor has a power or option on default to appoint a receiver and the exercise of this power creates a fixed specific charge. The relevant principles were summarised by Buckley LJ in Evans v Rival Granite Quarries (1910) 2 KB 979 at 999 in a well-known passage that was approved by Gibbs J in Luckins v Highway Motel (Carnarvon) Pty Ltd (1975) 133 CLR 164 at 173. A similar principle governed the effect at law of an agreement to transfer future goods as security for a debt. This was explained by Lord Chelmsford in Holroyd v Marshall (1862) 10 HLC 191 (11 ER 999) at 216-218 (1008-1009):- "At law an assignment of a thing which has no existence, actual or potential, at the time of the execution of the deed, is altogether void . . . But where future property is assigned, and after it comes into existence possession is either delivered by the assignor or is allowed by him to be taken by the assignee ... the property would pass... ... if the deed contained a licence or power to seize the after acquired property ... the assignee might have taken possession and so have done the act which was necessary to perfect his title at law. This will clearly appear from the case of Congreve v Evetts (10 Exch. 298), in which there was an assignment of growing crops ... as a security for money lent, with a power for the assignee to seize and take possession of the crops ... and Baron Parke said, 'If the authority given by the debtor . . . had not been executed, it would have been of no avail ... but when executed ... it is the same ... as if the debtor himself had put the plaintiff in actual possession of such crops."' The cases thus illustrate how a power over property conferred by its owner can, when exercised by the donee, create a specific security over that property. In my opinion the action of the Lender in lodging the caveat operated as an exercise of its option to attach its debt to the subject property, and created an equitable charge over that property. 1. This decision should be considered in the light of the decision of the Court of Appeal in Troncone v Aliperti (1994) 6 BPR 13,291; BC9402483, where Mahoney JA said (with the agreement of Priestley JA and Meagher JA) at BC9402483 p 2, 3; It was, in my opinion, the clear intention of the parties that the creditors should have from Mr Aliperti the authority "to lodge a caveat on any property owned by" him. In my opinion, CL5, on its proper construction authorised the person or persons described in the relevant agreement as "the Creditors" to lodge a caveat to protect the interest of that creditor or creditors… It is a fundamental principle of construction that "Whoever grants a thing is deemed also to grant that without which the grant itself would be of no effect" ("Cuicunque aliquis quid concedit concedere videtur et id sine quo res ipsa esse non potuit"): Broome's Legal Maxims (9th ed) at 307. The principle is said to go back at least to Shepherds Touchstone 89. A caveat cannot be entered against land unless the caveator has the relevant proprietary interest in the land: see Real Property Act 1900, s74F(1) ("a legal or equitable estate or interest in land"). Therefore, unless there be evident an intention to the contrary, the grant to the creditors of an authority to lodge a caveat on the relevant property carried with it by implication such an estate or interest in land as was necessary to enable that authority to be exercised. There was, in the present case, no intention to the contrary. Indeed, it might be thought to involve deception or worse if Mr Aliperti had intended to authorise the lodgment of a caveat but to withhold the creation of the interest in the land necessary for that to be done. 1. White J considered the meaning of Troncone v Aliperti in Redglove Projects Pty Ltd v Ngunnawal Local Aboriginal Land Council [2004] NSWSC 880; (2004) 12 BPR 22,319, where his Honour said: [20] In my view the ratio decidendi of Troncone v Aliperti is that on the proper construction of the agreement that the creditors could lodge caveats on the debtors' property, the debtor impliedly granted an equitable charge to the creditors. That was the view of Meagher JA. It appears from Priestley JA's reference to Murphy v Wright and the difference in the language of the agreements under consideration in each case that Priestley JA also regarded the case as one in which an equitable charge was granted. [21] In later cases Troncone v Aliperti has mostly been characterised as a case of an implied charge. (Townsend v Coyne (1995) 6 BPR 13,935 at 13,940; Chiodo v Murphy & Doherty [1996] ANZ ConvR 160 at 162; Go-Tell Nominees Pty Ltd v Nichols (7 February 1997, Supreme Court of Victoria, Cummins J, unreported, BC9700713 at 6; Neoform Developments & Interiors Pty Ltd v Town & Country Marketing Pty Ltd (2002) 49 ATR 625 at 627 [21]; Brandling v Weir [2003] NSWSC 723 at [53]). [22] Mahoney JA did not decide that the clause in question created an equitable charge. His Honour's first finding was that by applying the principle of construction that there is an implied grant of all that is necessary to make an express grant effectual, the agreement in question created by implication whatever interest was sufficient to create an equitable estate or interest in land, without deciding what that estate or interest was. (See Jones v Baker (2002) 10 BPR 19,115 at [89]–[90]; Thu Ha Nguyen v Larry Quoc Huy On & Ors (2004) NSW ConvR 56-065 at [19], [22]; Brandling v Weir at [53]; [2004] NSWSC 142 at [9]). That finding has no implication for the present case. Mahoney JA expressly said that it was unnecessary to determine the precise nature of interest that was impliedly granted. 1. The authorities establish that, where the only right given to the creditor is to lodge a caveat, it might be difficult to determine whether the parties intended the lender to have a charge over the relevant property. A mere right to lodge a caveat, without more, may not give the creditor a charge: see Taleb v National Australia Bank [2011] NSWSC 1562; (2011) 82 NSWLR 489 at (61); cf Coleman v Bone (1996) 9 BPR 16,235 and Iaconis v Laza [2007] NSWSC 1103; (2007) 13 BPR 24,937. However, it may be, when all of the circumstances are considered, and the relevant term is construed in its context, the Court should find by implication that the parties intended that the creditor would be entitled to a charge: see Murphy v Wright. 2. Lastly, I will refer to the decision of Ward J (as her Honour then was) in Bondi Beach Astra Retirement Village Pty Ltd v Hohman [2010] NSWSC 260, where she said: [118] Troncone v Aliperti was treated in a similar way by Rein J, recently, in Sinclair v Registrar-General [2010] NSWSC 173 and by Young CJ in Eq (as his Honour then was) in Northern Star Agriculture Pty Ltd v Morgan and Banks Developments Pty Ltd [2007] NSWSC 98, who stated: [57] In any event, it is fairly clear, as Hall J noted, that there is no equitable charge in the instant case. The decision of the Court of Appeal in Troncone v Aliperti (1994) 6 BPR 13,291 does not support the proposition that whenever there is the grant of a right to lodge a caveat, there is automatically a grant of an equitable charge. At its highest it says that in the ordinary case, if there is nothing more, a court can presume such a grant … 1. In my view, the wording of clause 22 of the Investor Agreement had the effect of authorising Dr Wai to create a charge over the Property by lodging a caveat against the title. Clause 22 must have been inserted in the Investor Agreement for some purpose. If that purpose was not to permit Dr Wai to create an equitable charge over the Property, if there was a default, then it had no purpose. The fact that the right to lodge the caveat is only given in the context of a default suggests that Dr Wai was intended to be able to create a security for the debt. In this case I have concluded that I should presume that an equitable charge was impliedly granted to Dr Wai. That implication is consistent with the statements made by Ms Thei and Mr Firman before the Investor Agreement was signed. 2. However, the judgment of Handley JA in Murphy v Wright would suggest that the charge was not created by clause 22 alone, but by the lodgement of the caveat as authorised by that clause. If that is correct, the charge over the Property to which Dr Wai is entitled was not created until 11 October 2011. 3. On the other hand, it is arguable that Troncone v Aliperti has the effect that an implied charge is created at the time the debtor authorises the creditor to lodge a caveat, because the interest in the land necessary to support the caveat must be created by the agreement, even if only by implication. 4. The issue of when the charge is created is likely to depend upon the proper construction of the relevant agreement, and the circumstances in which, and the time at which, the creditor is authorised to lodge the caveat. 5. The parties to Dr Wai's notice of motion did not address the question in their submissions of the time when Dr Wai's charge was created. As Ms Ros and Mr Kelly's notice of motion was not dealt with, the parties also have not dealt with the issue of the priority of the two charges, assuming that Ms Ros and Mr Kelly can substantiate the charge upon which they rely. 6. As the parties have not had an opportunity to make submissions, I will not enter into any further consideration of the question of when Dr Wai's charge was created. 7. As both charges, if valid, are equitable, the priority issue is likely to be determined by the maxim: where the equities are equal, the first in time prevails. 8. I have therefore concluded that it would be premature for the Court to make any final determination or orders in respect of Dr Wai's notice of motion. As I have found that Dr Wai had a charge over the Property, and accordingly has a charge over the money that is now in Court, it will be necessary for the Court to address not only the validity of the charge claimed by Ms Ros and Mr Kelly, but if that charge is found to be valid, it will also be necessary for the Court to determine the priority issue. 9. I will therefore not make any order at this stage. It will be necessary for the hearing of the two notices of motion to be relisted, so that the balance of the issues can be determined. ********** Amendments 06 July 2015 - Firm name for applicant on the motion filed 14 May 2015 corrected Cordata Partners changed to Cordato Partners Lawyers 10 August 2015 - Changes in representation: Counsel: Amy Knox (applicant motion filed 14.5.15) M Bennett (applicant on motion filed 19.5.15) Solicitors: Tresscox Lawyers (applicant - motion filed 14.5.15) Cordato Partners Lawyers (applicant - motion filed 19.5.15) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 August 2015