Priorities in Equity. Flashcards
What is the general rule of priority for equitable v equitable interests?
When rights are equal the first in time rule applies.
How many exceptions are there to the general rule of E v E priority?
2.
What is the first exception to the general rule of E v E priority? Which case illustrates this? Give facts and held.
Where owner is at fault (all circumstances considered), unless later right is a gift. Illustrated in Rice v Rice - facts - M bought land (old case when the rules applied to land) from G, and paid partly. G held possession as lien, but later agreed to say nothing is owed so M can charge. Held: G denied his own equity.
What is the second exception to the general rule of E v E priority?
Where earlier equity is either a 1) ‘mere’ equity, or 2) an incohate equity, or 3) when an earlier right is a floating charge, while later is a fixed charge. It also requires owner of later equity to be a 1) purchaser, 2) with good faith, 3) for value, and 4) without notice.
What is the general rule for E v L rights?
Equitable rights are weaker.
What is needed for a later legal right to prevail? Which case illustrates this? Give held.
You need to 1) get a legal right without constructive notice (objective standard - test being whether equitable right is discoverable) of the equitable right, 2) be a purchaser - meaning receiving right by gift or sale, not by operation of law, 3) have given value - money or money’s worth. Illustrated by Pilcher v Rawlins. Held: constructive notice is needed for later legal right to fail.
