The borrowers agreed to charge their property as security for a second mortgage and the lender lodged a caveat. The caveator then sought to maintain his caveat in the teeth of the bank exercising power of sale.
The court found no evidence to suggest that the bank was acting fraudulently or improperly in relation to the exercise of its power of sale as mortgagee, proposing to retain the surplus to be distributed amongst the caveators by agreement or court order. Accordingly the court found that the caveator, claiming under an unregistered equitable interest, could not stand in the way of a first registered mortgagee selling pursuant to a power of sale.
The application was dismissed.