Choy v Hoang [2007] NSWSC 390

In this case there was loan agreement which provided, in the event of default, for lender to register a caveat over the property and sell it.

The lender ultimately lodged a caveat which simply described the interest being protected as an “equitable interest. The borrower sought to lapse the caveat and by these proceedings the lender sought to extend the caveat.

The court determined the caveat was fatally flawed as the interest said to be protected was not sufficiently defined. An effective caveat must specify the nature of the interest.

Nevertheless the court granted the lender leave to lodge another caveat upon the grouns that the interest created by the loan agreement was obviously a charge over the land because it expressly conferred a power of sale.

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