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[2026] QCA 68
appellant. The appeal was allowed. The declarations in Orders 1 and 2, and Order 7, made on 30 September 2025, and the Orders made on 9 December 2025, were set aside. The Court declared that the First...
The Court of Appeal decided that the priority deed gave ProLend first-ranking treatment not only for principal and conventional mortgage costs, but also for the relevant amounts ProLend paid to finish the development and pay infrastructure charges, provided those sums were secured under the ProLend Mortgage. The mortgage and Step-In Deed were read together. The Court rejected the argument that a sum could only qualify if the mortgage itself was the original source of the payment obligation. It also explained that the scheduled principal component could not be expanded by treating extra principal as an “other” amount. The declarations below were set aside, and the Supreme Court was to settle the distribution of the controlled funds consistently with the Court of Appeal’s declaration.
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2,503 words · generated 08/10/2026
3 cited instruments linked from this judgment.
The case concerned competing mortgage priorities over the proceeds of a land development. Aushome Developments Pty Ltd owned land it intended to subdivide and sell. It had arranged finance from two lenders, ProLend Solutions No 50 Pty Ltd and Monaco Solicitors Pty Ltd. ProLend agreed to lend $8,230,877 on 4 June 2021; Monaco agreed to lend $2,750,000 on the same day (paras 5-6). Both lenders took mortgages, and ProLend’s mortgage was registered first on 11 June 2021 (para 8).
The financing arrangements were connected to construction. ProLend, Aushome and the builder entered a Step-In Deed on 6 June 2021. It allowed ProLend, in specified circumstances, to step into Aushome’s position under the building contract and cause the development works to be completed (paras 7, 22-23). ProLend, Monaco and Aushome also entered a Deed of Priority governing the lenders’ respective claims. The amended deed, dated 13 October 2021, was the relevant agreement on appeal. It specified a First Priority Amount of $8,430,877 (paras 10, 26).
The deed established a distribution sequence. ProLend would receive enforcement proceeds up to the First Priority Amount; Monaco would then receive proceeds up to its Second Priority Amount; ProLend could then receive amounts secured by its mortgage above the First Priority Amount; and Monaco could receive any remaining amounts above its Second Priority Amount (para 24). The dispute was about what fell within ProLend’s first-ranking amount.
Aushome defaulted under both mortgages by April 2022 (para 11). ProLend exercised its step-in rights and paid substantial sums to the builder and others to complete the works. It also paid $1,925,161.60 in infrastructure charges to the local authority, which were required to secure release of the sealed subdivision plan (para 12). The parties accepted that those sums were owed by Aushome to ProLend and were secured under the ProLend Mortgage. They disagreed about whether Monaco had to wait behind those sums in the distribution of enforcement proceeds (para 14).
At first instance, the primary judge treated the payments as outside the First Priority Amount. ProLend appealed that construction. Monaco cross-appealed on related questions about the limits of ProLend’s priority (paras 15-17). The Court of Appeal allowed ProLend’s appeal, set aside the relevant earlier orders, declared how the First Priority Amount was to be calculated, and remitted the distribution question to the Supreme Court (para 70).
The Court treated construction of the Deed of Priority as an objective exercise, applying the principles in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104. That approach asks what a reasonable businessperson would understand from the contract’s language, considered in its context and in light of its commercial purpose (paras 28-30). The context included the related mortgages, the Step-In Deed, the stated principal amount and the fact that the priority deed was made as part of the financing arrangements (para 30).
The definition of First Priority Amount contained three components: the scheduled dollar amount; specified amounts such as interest, costs, fees, charges, duties and expenses; and “any other amount which may be debited to the account under the terms of the First Mortgagee’s Mortgage” (paras 25, 32-33). The key question was how to understand that final wording.
Monaco argued, in substance, that the builder payments arose under the Step-In Deed rather than under the ProLend Mortgage. On this approach, they could be secured under the mortgage without being amounts debitable under its terms (para 46). The Court rejected the proposed restriction. It reasoned that the phrase did not identify the original source of an obligation or expenditure. Rather, it asked whether the amount could be added to the Secured Money under the mortgage, and whether Aushome was obliged under the mortgage to repay that secured amount (para 56).
That reading was supported by the mortgage’s broad definition of Secured Money. It included money paid by ProLend in exercising rights or powers under the mortgage (para 20). The Step-In Deed also said that money paid by ProLend under clause 5.5 would be treated as money secured by and recoverable under the security (para 23). The parties accepted that the builder payments and infrastructure charges were secured and owed by Aushome to ProLend (para 34). These connected terms supported treating the payments as part of the relevant first-priority amount.
The Court also rejected the idea that ProLend’s exercise of step-in rights meant Aushome ceased to owe the builder. The Step-In Deed contemplated possible novation and allowed ProLend to step out. Clause 6 referred to payments being made directly to the builder on account of money Aushome was due to pay under the Building Contract (para 39). The Court considered it commercially implausible that the builder would be left without obligations owed by Aushome, absent clear language producing that result (para 39).
The Court addressed the structure of the definition as a whole. It read the scheduled amount as relating to principal advanced and the following categories as additions covering other kinds of amounts (paras 57-60). An amount must be owed by Aushome to qualify for priority, notwithstanding the scheduled figure (para 60). But principal advanced beyond the scheduled amount could not be treated as an “other” amount, because it was of the same kind as the principal already dealt with in the first component (para 61). This distinction preserved a role for the later priority tiers: secured money could exceed the First Priority Amount, even though specified amounts received first priority (para 62).
Finally, Monaco argued that ProLend’s construction made the priority deed redundant, including because the statutory provision on further advances already addressed priority (paras 44-45, 63). The Court rejected that argument. The deed addressed matters beyond the distribution sequence, including redemption, assignment, information-sharing and treatment of contingent amounts (para 53). It also created a cascading priority arrangement, rather than simply resolving whether a further advance ranked ahead or behind under the statutory rule discussed by the Court (para 64).
The judgment does not announce a new general rule of contract law. It applies the established construction approach described in Mount Bruce Mining to a specific set of linked financing documents. The Court said the applicable approach was uncontroversial: contractual rights are determined objectively by reference to text, context and purpose (paras 28-30).
The decision’s practical contribution is its application of that approach to the phrase “any other amount which may be debited to the account” in a priority deed. The Court held that, on this deed and mortgage, the phrase was not confined to payments whose original obligation arose in the mortgage. It was enough that the amounts were added to the Secured Money and repayable under the mortgage (para 56). The effect depends on the particular wording and connected documents; the judgment does not establish that payments under any step-in deed will automatically rank ahead of another mortgagee.
The Court also explained how the definition’s components operated together. It treated the scheduled amount as relating to principal advanced, with additional categories covering other qualifying amounts. At the same time, it held that excess principal could not be brought into the “any other amount” category, because that would bypass the limit imposed by the principal component (paras 57-62). This is a construction of the particular definition, rather than a general statutory rule.
The decision discussed s 82 of the Property Law Act 1974 (Qld), which the Court described as addressing circumstances in which a further advance by a first mortgagee may rank ahead of a subsequent mortgagee. The Court referred to arrangements with a subsequent mortgagee, lack of notice of the subsequent mortgage, and an obligation under the mortgage to make further advances (para 63). It noted that the parties’ deed supplied an express arrangement and established a cascading series of priorities (para 64). The judgment also noted that a provision in modified form now appeared in s 126 of the Property Law Act 2023 (Qld) (para 53 and footnote 5). The judgment does not decide a broader question about the operation of those statutory provisions beyond the parties’ contractual arrangement.
The Court separately discussed infrastructure charges. It noted that s 119(12) of the Planning Act 2016 (Qld) provides that an infrastructure charge attaches to the premises, and that the ProLend Mortgage required Aushome to pay charges relating to the property (para 66). This supported the Court’s alternative observation that the charges would qualify even on Monaco’s narrower approach. The Court expressly said it was strictly unnecessary to decide that point given its primary construction of the deed (para 66).
At paragraph 29, the Court set out the contract-construction approach from Mount Bruce Mining: “The rights and liabilities of parties under a provision of a contract are determined objectively” by reference to the text, context and purpose. In plain English, the court asks what the words would mean to a reasonable businessperson in the setting of the whole arrangement, rather than relying only on one party’s later view of what was intended.
At paragraph 39, the Court rejected the suggestion that Aushome stopped being responsible to the builder simply because ProLend stepped in. The deed’s provisions about direct payments and the possibility of later stepping out were inconsistent with that result. In practical terms, the Court read the documents as allowing ProLend to manage completion without automatically extinguishing Aushome’s underlying payment responsibilities.
At paragraph 56, Doyle JA explained that the disputed words did not “seek to identify the source of the obligation or occasion for the expenditure”. Instead, the question was whether the amount could be added to Secured Money under the ProLend Mortgage and was repayable under that mortgage. Put simply, the payment’s origin outside the mortgage did not, by itself, prevent it from qualifying under the priority deed.
At paragraph 61, the Court said that excess principal could not be included in the “any other amount” category. It was not an “other” kind of amount, but another amount of the same kind as principal. This prevents a party from using a general catch-all phrase to undo a limit elsewhere in the definition.
The Court’s summary at paragraph 67, followed by the formal declaration at paragraph 70, identifies the result: the First Priority Amount included the $5,335,714.98 in principal advanced, qualifying costs and other amounts secured by the mortgage, the relevant builder and infrastructure payments, and interest on amounts included in the Money Secured. The order was therefore not simply that all money secured by ProLend automatically ranked first. The declaration tied the specified sums to the language and structure of the deed.
The decision is most relevant where competing mortgagees have agreed to a priority deed that defines one lender’s first-ranking amount by reference to a scheduled amount and other amounts debitable or secured under its mortgage. It is especially relevant if the first mortgagee also has a step-in right to complete works after the borrower defaults, and the mortgage or step-in deed provides that payments made in exercising that right become secured or recoverable.
The case is also relevant where the parties dispute whether the priority deed covers amounts that are accepted as secured under the first mortgage but arise from another document or from payments made after default. The Court’s answer was based on the wording of the documents before it, including the mortgage’s definition of Secured Money and clause 5.5(c) of the Step-In Deed (paras 20, 23, 34-36).
The result may also be relevant where a project requires payment of local authority infrastructure charges before subdivision plans can be released. The judgment considered both the mortgage’s obligations to pay property-related charges and the statutory feature that infrastructure charges attach to premises (para 66).
The decision does not determine how differently worded priority deeds should be construed. Nor does it determine whether a payment qualifies where the mortgage does not include it within secured money, the borrower is not liable to repay it, or the priority deed uses materially different language. Those questions would turn on the relevant documents and circumstances, applying the interpretive approach identified by the Court.
The supplied judgment records no later judicial treatment of ProLend Solutions No 50 Pty Ltd v Monaco Solicitors Pty Ltd. Because this is the judgment being analysed and it was delivered on 17 April 2026, the material provided does not establish whether later courts have applied, distinguished, followed or criticised it. No later cases or citations should be inferred from this judgment alone.
The relationships with earlier authorities that can be identified from the text are narrower. The Court applied the contract-construction approach in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (paras 28-30). It cited Sucrogen Australia Pty Ltd v Westpac Banking Corporation when discussing a mortgagee’s potential right to require transfer of a mortgage under s 94 of the Property Law Act 1974 (Qld) (para 53). It referred to Beachquest Pty Ltd v Interstate Mortgage and Investment Pty Ltd in connection with the statutory further-advance argument under s 82 (para 63 and footnote 5). The judgment does not describe those latter cases as establishing the outcome on the construction issue decided in this appeal.
The judgment resolves the construction of this particular amended Deed of Priority against the terms of the ProLend Mortgage and Step-In Deed. It leaves open how a different deed would operate if its definition of priority amount used narrower language, expressly excluded post-default expenditure, or treated step-in payments differently. The Court’s reasoning depends on the specific text and the broad definition of Secured Money in this mortgage (paras 20, 25, 56).
The judgment also does not decide whether every payment made by a mortgagee after default will qualify. It addresses payments to the builder and infrastructure charges which the parties accepted were owed by Aushome and secured by the ProLend Mortgage (paras 14, 34). A dispute about the borrower’s liability, whether a payment falls within the mortgage, or whether the amount is properly included in secured money would present issues not determined here.
The Court’s alternative analysis of infrastructure charges was expressly unnecessary to its primary conclusion. It considered that the charges could satisfy Monaco’s narrower construction because of the mortgage provisions and the statutory attachment of an infrastructure charge to premises (para 66). The judgment does not resolve every possible issue concerning the classification, timing or calculation of such charges.
Finally, the Court did not decide the final distribution of the controlled funds. It remitted the matter for orders consistent with its declaration, unless the parties agreed within seven days on the form of orders for the Court to make (para 70). The judgment therefore determines the contractual priority framework but leaves the consequential distribution process to be completed.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on, relying on, or using this analysis, have it checked by a qualified Australian lawyer.
Source: Queensland Judgments (Supreme Court Library Queensland) (www.queenslandjudgments.com.au). Converted to plain text by ZoeLaw. Not the official version.
SUPREME COURT OF QUEENSLAND
CITATION: ProLend Solutions No 50 Pty Ltd v Monaco Solicitors Pty Ltd [2026] QCA 68
PARTIES: PROLEND SOLUTIONS NO 50 PTY LTD / ACN 650 480 014 / (appellant/cross-respondent) / v / MONACO SOLICITORS PTY LTD / ACN 103 138 469 / (first respondent/cross-appellant) / AUSHOME DEVELOPMENTS PTY LTD / ACN 641 727 157 / (second respondent)
FILE NO/S: Appeal No 4809 of 2025 / SC No 10102 of 2023
DIVISION: Court of Appeal
PROCEEDING: General Civil Appeal
ORIGINATING COURT: Supreme Court at Brisbane – [2025] QSC 199 (Bradley J)
DELIVERED ON: 17 April 2026
DELIVERED AT: Brisbane
HEARING DATE: 30 March 2026
JUDGES: Bond JA, Doyle JA, Henry J
ORDERS: The appeal is allowed. The declarations made as Orders 1 and 2, and also Order 7, of the Orders made on 30 September 2025 are set aside. The Orders made on 9 December 2025 are set aside. It is declared that on the proper construction of the Amended Deed of Priority made by the appellant, the first respondent and the second respondent and bearing date 13 October 2021, the “First Priority Amount” when that expression is used in clauses 2.2(a) and 2.2(b), is the sum of the following: the principal amounts advanced by the appellant to the second respondent in the amount of $5,335,714.98;any costs, fees, charges, duties and expenses (including legal expenses) which are included in the Money Secured by the Mortgage granted by the second respondent to the appellant; the sums paid to the builder or others under the building contract identified in the Builders Side Deed bearing date 4 June 2021 between the appellant, the second respondent, Skerman Civil Pty Ltd and Civil and Water Design Pty Ltd, and the sums paid to the Logan City Council as infrastructure charges pursuant to the Charge Notices dated 27 October 2017 identified as notices 11498152 and 11498183 which are included in the Money Secured by the Mortgage granted by the second respondent to the appellant; interest on those amounts as are included in the Money Secured under the Mortgage granted by the second respondent to the appellant. The proceedings are remitted to the Supreme Court for orders to be made for the distribution, consistent with the above declarations, of the monies held in the controlled money account identified in the Order of 9 December 2025, unless within 7 days the appellant and first respondent agree to a form of such orders to be made by this Court. The first respondent pay the appellant’s costs of the appeal and of the cross appeal, and its costs of the trial.
CATCHWORDS: CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the appellant and first respondent each agreed to lend the second respondent sums of money – where the appellant, second respondent and a builder entered into the ‘Step-In Deed’ which authorised the appellant to step into the position of the second respondent to cause the completion of development works – where the appellant and first respondent secured their loans by registered mortgages – where the appellant was the first registered mortgagee – where the parties entered a Deed of Priority governing the rights of priority between the mortgagees – where the second respondent defaulted under both mortgages – where the appellant exercised its step-in rights – where the appellant made payments to the builder under the Step-In Deed and paid infrastructure charges to the local authority – where the primary judge found that those payments did not fall within the First Priority Amount in the Deed of Priority – whether the relevant payments fall within the meaning of ‘First Priority Amount’ under the Deed of Priority / Planning Act 2016 (Qld), s 119(12) / Property Law Act 1974 (Qld), s 82, s 94 / Property Law Act 2023 (Qld), s 126, s 132 / Beachquest Pty Ltd v Interstate Mortgage and Investment Pty Ltd [2003] 2 Qd R 586; [2001] QSC 512, cited / Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37, applied / Sucrogen Australia Pty Ltd v Westpac Banking Corporation [2012] 2 Qd R 175; [2011] QSC 393, cited
COUNSEL: G J Handran KC, with R A Kipps, for the appellant/cross-respondent / A P Cheshire SC for the first respondent/cross-appellant / No appearance for the second respondent
SOLICITORS: Summer Lawyers (Australia) Pty Ltd for the appellant/cross-respondent / Mills Oakley for the first respondent/cross-appellant / No appearance for the second respondent
BOND JA: I agree with the reasons for judgment of Doyle JA and with the orders proposed by his Honour.
DOYLE JA: This is an appeal from a judgment determining certain issues affecting the rights of priority between First and Second Mortgagees.1 The appellant is the First Mortgagee, the first respondent is the Second Mortgagee, and the second respondent is the Mortgagor but has played no role in the trial or in this appeal.
Background
The second respondent, Aushome, was the owner of the land which it sought to develop, intending to have it subdivided into lots for sale.
Prior to the matters which are directly relevant to this appeal, Aushome had entered into a Building Contract with a builder to perform the works necessary to carry out that development and had granted a related residential building company an option to purchase the proposed lots after they had been created.
On 4 June 2021 the appellant, ProLend, agreed to lend Aushome a figure of $8,230,877.00 for a term of 8 months with a rate of interest being either 9.99 per cent per annum, or in the event of default, 18 per cent per annum. The terms of the loan required Aushome to prepay a number of significant amounts which were deducted from the principal sum before it was paid to Aushome. A written direction was given by Aushome authorising those payments and further that a sum of $400,000 be withheld by ProLend for “contingency costs”.
On the same day, that is 4 June 2021, the first respondent, Monaco, agreed to lend $2,750,000 to Aushome for a term of 6 months with an even higher rate of interest.
On 6 June 2021 ProLend, Aushome and the builder executed a deed described as “Builder’s Side Deed” but to which I will refer as the “Step-In Deed”. Pursuant to the Step-In Deed in certain events ProLend was authorised to step into the position of Aushome under its contract with the builder to cause the development works to be completed.
Each of ProLend and Monaco took mortgages to secure the loans they had agreed to make. They were both registered on 11 June 2021, ProLend being, as I mentioned, the first registered mortgagee (the ProLend Mortgage).
Immediately prior to that occurring ProLend, Monaco and Aushome entered into a “Deed of Priority” which, as the name suggests, governs the rights of priority as between the two Mortgagees and some other matters.
An amended Deed of Priority was entered into and bears the date 13 October 2021 when signed by Monaco. At trial the relevance of this amended Deed of Priority was disputed but that has now been resolved. The amended deed is the relevant Deed of Priority governing the rights between the parties to this appeal. It is materially the same as the Deed of Priority as first made, save that whereas that document identified the mortgages as documents to be registered, and the First Priority Amount in the schedule was a stated figure (at that time being the same as the Principal Amount in the ProLend Mortgage), in the amended Deed of Priority the references are to the Mortgages as registered, and the First Priority Amount in the schedule was increased by $200,000. I shall refer to the deed as amended as the Deed of Priority.
By April 2022 Aushome had defaulted under both Mortgages and the period under the ProLend loan by which Aushome was to have sold the land expired on or about 16 June 2022 “with no sale in prospect”: see R [42].
The Declarations Made
“1. On the proper construction of the Amended Deed of Priority made by the parties, dated 13 October 2021, the ‘First Priority Amount’ comprises the amount of $8,430,877, plus interest on the sum of $5,335,714.98 and associated costs, fees, charges, duties, expenses and any other amount that could be debited to the account of the second respondent under the terms of the first respondent’s loan, less the amount of $400,000 which the first respondent withheld from the second respondent for contingency costs.
On the proper construction of the Amended Deed of Priority dated 13 October 2021:
a. the sums which the first respondent paid to the builder under the building contract and to others, including the local government, after 16 June 2022 to complete the development of the land totalling $6,304,726.95 (or $6,307,681.84) were not interest, costs, fees, charges, duties or expenses or any other amount that could be debited to the account of the second respondent under the terms of the first respondent’s loan;
b. the first respondent is not entitled to recover the sums in subparagraph (a), or interest on those sums and associated costs, as part of the ‘First Priority Amount’.”
The Issues
The grounds of appeal are as follows: Whether the primary judge erred in holding that payments ProLend made to the builder under the Step-In Deed and the payments it made of the infrastructure charges were not within the First Priority Amount in the Deed of Priority. This issue of construction was decided against ProLend at first instance and is the subject of grounds 1 and 2 of the notice of appeal.Whether the primary judge ought to have found that the payment of the infrastructure charges was one which did increase the value of the land held as security for the two Mortgages. This is the subject of ground 3 of the notice of appeal.2 On the hearing of the appeal, reliance on this as a ground of appeal was not pressed by the appellant.
There is a Cross Appeal by Monaco. All grounds of the Cross Appeal raise a series of seemingly closely related issues of construction of the Deed of Priority as to the limits of the sums for which ProLend is given priority.
The First Mortgage
The loan arrangement between Aushome and ProLend is in the body of the Mortgage. The formal instrument refers to Schedule A and some particular key aspects. The stated Principal Amount of the loan is $8,230,877.00. Schedule A sets out other terms to which it is largely unnecessary to refer. On the face of Schedule A it is clear that the mortgagor is to conduct “Works” and to meet milestones for it. The conditions precedent to the loan include:Securing bank guarantees from the Builder to secure its performance under the Building Contract;The execution of that Building Contract; andThe execution of the Step-In Deed between the builder, ProLend and Aushome.
Schedule B is also a part of the Mortgage and provides for the upfront fees which were deducted before payment to Aushome. It did not stipulate for a $400,000 contingency to be withheld, but a “Cheque Direction” signed by the borrower did instruct that sum to be “held for contingency costs”.
The Memorandum of Common Provisions of the Mortgage:Defined ‘Principal Amount’ to mean “the amount stipulated in Schedule A as the Principal Amount, whether or not that amount has in fact been advanced to the Borrower or at the Borrower’s request…”: cl 1.1.Defined the ‘Secured Money’ as follows:
“(a) The Principal Amount
Interest
Outstanding Interest
Fees;
Costs and Expenses including legal Fees;
Money that any Obligor is, or at any time may become, actually or contingently liable to pay to the Lender for any reason or on any account whatsoever
Money the Lender has advanced in connection with this Mortgage, whether or not that amount has in fact been advanced to the Borrower or any other Obligor or at the Borrower’s or any other Obligor’s request, and whether or not the Borrower or any other Obligor had knowledge of the advance
…
Money paid by the Lender to any other Person as a result of the exercise by it of any right or power under this Mortgage, including but not limited to any amount paid in accordance with Clauses 4.6, 6.3 and 18.3(h)
…
Any money deemed by the Lender, on reasonable grounds, as necessary for it to retain so as to provide adequate security for the Lender’s rights to be indemnified in accordance with the provisions of this Mortgage and/or for the Lender’s Legal Fees in connection with the enforcement of any indemnity under this Mortgage”.
Defined in turn, each of the terms ‘Interest’; ‘Outstanding Interest’; ‘Fees’; ‘Costs and Expenses’. ‘Costs and Expenses’ is defined as:
“(a) any costs, expenses, fees, charges and disbursements, including all Legal Fees incurred by the Lender arising from or in connection with
…
the exercise of any rights or powers under this Mortgage, including but not limited to the taking of any Recovery Action;
any Event of Default;
the exercise by the Lender of any of its rights arising from any Event of Default;
…
any Tax, or Taxes, relating to or imposed on the Mortgaged Property that any Obligor has failed to pay and that the Lender pays;”
The words Tax, and accordingly Taxes are defined in cl 1.1, cl 1.2(c) and (d) to mean:
“‘Tax’ means any tax, levy, GST, Rates, land tax, duties, stamp duties, fees, expenses or charges imposed in any manner whatsoever by any Government Authority together with any related interest charges, penalties, fees or other amounts in connection therewith.”
Provides that Aushome agrees to pay the Secured Money (cl 3.1) and that the land is charged with that payment (cl 2.1). It also provides that Aushome promises to observe all of its obligations (including those under the mortgage) which include, by clause 9.1, payment of all amounts for which the Mortgagor is liable as the owner of the land:
“…including but not limited to
Rates levied or charged for or in respect of the Mortgaged Property or by reason of the grant of this Mortgage; and
any Taxes relating to or arising as a result of the Mortgagor’s ownership of the Mortgaged Property.”
Provides for events of default in broad terms: cl 18. They include in cl 18.2 the following:
“(a) An Obligor fails to pay any Secured Money in accordance with this Mortgage;
An Obligor fails to comply with any of the Obligations;
…
(z) there is a delay in the timetable approved by the Lender for construction of the Works and in the Lender’s opinion this delay is excessive; or
(aa) costs for construction of the Works exceed the cost estimate approved by the Lender, and in the Lender’s opinion, the excess cost is material.”
The Monaco Mortgage
The Step-In Deed
This deed is between ProLend (identified as the lender), Aushome (identified as the borrower) and Skerman Civil Pty Ltd and Civil and Water Design Pty Ltd (the builder).
By this deed:The builder consented to the execution of the first mortgage: cl 2.ProLend was given a right to give a step in notice in the event of a default under the mortgage: cl 5.1. The step-in notice must amongst other things state that default has occurred under ‘the Security’: cl 5.2. The giving of such a notice was not a default under the Building Contract: cl 5.3.ProLend (after stepping in) promises to comply with the obligations of Aushome under the Building Contract, with the qualification that the obligation to pay money was only if certified by a quantity surveyor or similar professional or agreed to by ProLend as properly payable: cl 5.5(a).Provided, by cl 5.5(c):
“(c) All money paid by the Lender or an External Administrator under this clause 5.5 will be taken to be money secured by and recoverable by the Lender under the Security, whether or not the Security would but for this clause have this effect.”
Also provided by clause 6:
“6. Direct Payment
Subject to clause 3.2, the Borrower irrevocably authorises and directs the Lender to pay any of the money that the Lender is obliged to advance to the Borrower under the Mortgage for the purposes of paying the Builder, directly to the Builder on account of money which the Borrower is due to pay to the Builder under the Building Contract.”
The Deed of Priority
“2.1. Regulation of Priorities
The priorities as between the Mortgagees both at law and in equity will, for all purposes (including how the Enforcement Proceeds are to be distributed) be determined in accordance with clause 2.2.
2.2 Priority of distribution of Enforcement Proceeds
As between the First Mortgagee and the Second Mortgagee, the First Mortgagee has priority over the Second Mortgagee until the First Mortgagee has received the First Priority Amount.
Without limiting (a), the parties agree that the order of priority of distribution of Enforcement Proceeds shall be as follows:
first to the First Mortgagee in payment of all moneys secured by the First Mortgagee’s Mortgage up to a total of the amount of the First Priority Amount;
second to the Second Mortgagee in payment of all moneys secured by the Second Mortgagee’s Mortgage up to a total of the amount of the Second Priority Amount;
third to the First Mortgagee in payment of all moneys secured by the First Mortgagee’s Mortgage in excess of the First Priority Amount; and
fourth to the Second Mortgagee in payment of all moneys secured by the Second Mortgagee’s Mortgage in excess of the Second Priority Amount;
and to the extent necessary at law to give effect to the above priorities the Second Mortgagee postpones the priority and operation of the Second Mortgagee’s Mortgage in favour of the First Mortgagee.”
“Enforcement Proceeds means any money which either Mortgagee receives as a result of exercising its rights under the Mortgage.
…
First Priority Amount means the amount specified in the Schedule plus interest, costs, fees, charges, duties and expenses (including legal expenses) and any other amount which may be debited to the account under the terms of the First Mortgagee's Mortgage.
…
Second Priority Amount means the amount specified in the Schedule plus interest, costs, fees, charges, duties and expenses (including legal expenses) including any amount paid to the First Mortgagee under the terms of this Deed and any other amount which may be debited to the account under the terms of the Second Mortgagee’s Mortgage.”
The schedule which is referred to identifies the “First Priority Amount” as $8,430,877.
The Deed of Priority granted Monaco a right to redeem the First Mortgage (and so remove a prior secured creditor): cl 4.3. If that is done, ProLend agreed to assign its rights under the ProLend Mortgage “including the Tripartite Agreement”: cl 7.1(b). That expression is not defined in the Deed of Priority but the context of the originally executed Deed of Priority suggests it must have been intended to refer to the Step-In Deed.
The Issue of Construction
It is uncontroversial that the approach this Court is to follow in construing the Deed of Priority is that stated in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, [46]-[52] (French CJ, Nettle and Gordon JJ), [109] (Kiefel and Keane JJ), [121] (Bell and Gageler JJ).
In that case French CJ, Nettle and Gordon JJ said of the process (citations omitted):
“46 The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.
47 In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.
48 Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.
…
51 Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption ‘that the parties … intended to produce a commercial result’. Put another way, a commercial contract should be construed so as to avoid it ‘making commercial nonsense or working commercial inconvenience’.”
In this case the context includes the circumstance that the Deed of Priority was made (at least originally) together with the granting of the mortgages to both ProLend and Monaco, the Principal Sum provided for in the ProLend mortgage being the same dollar figure as that specified in the schedule to the Deed of Priority, and the entering into of the Step-In Deed. Both ProLend and Monaco were aware of these features.
As the issue in this appeal concerns the priority between the two Mortgagees the immediately relevant provision is cl 2.2 of the Deed of Priority. ProLend has priority over Monaco until ProLend has received the First Priority Amount: cl 2.2(a). Then, but not so as to limit that, cl 2.2(b) deals with the distribution of Enforcement Proceeds. It contemplates that there might be a first and third rung of entitlements in favour of ProLend. Both are described by use of the expression that the distribution is “in payment of all moneys secured by the First Mortgagee’s Mortgage”. Accordingly the provisions contemplate that those moneys secured might be divided into those up to “a total of the amount of the First Priority Amount” and those “in excess of the First Priority Amount”.
The core provision, however, is the definition of First Priority Amount. I have set it out above but it can be seen to have various components. It incorporates the dollar amount specified in the Schedule. The only such amount is (now) $8,430,877.
The structure of the definition is such that to that sum there are to be added:interest, costs, fees, charges, duties and expenses (including legal expenses) which may be debited to the account under the terms of the First Mortgagee’s Mortgage.any other amount which may be debited to the account under the terms of the First Mortgagee’s Mortgage.
As already mentioned, there is no dispute that all of the sums which were paid to the builder or for infrastructure charges are accepted as being owed by Aushome to ProLend and are secured monies under the ProLend Mortgage. However, it is urged by Monaco that this does not satisfy the requirement that they be “any other amount which may be debited to the account under the terms of the First Mortgagee’s Mortgage”.
The primary judge accepted that submission. His Honour concluded:that by exercising its step in rights ProLend “took upon itself any risk arising from cost overruns or delays in the completion of the works”: R [44].the payments so made were not payments made “by Prolend on Aushome’s behalf. Once Prolend stepped-in, Aushome was no longer responsible to pay the builder and was no longer the person paying the builder”: R [45].
Of course his Honour is not to be understood as suggesting these features meant the sums were not payable by Aushome and secured under the ProLend Mortgage. They clearly were: first having regard to the Step-In Deed clause 5.5(c); and secondly having regard to the wide definition of ‘Secured Money’ in the ProLend Mortgage, especially subparagraph (f).
“(a) if an arrangement has been made to that effect with the subsequent mortgagees; or
if the mortgagee had no notice of such subsequent mortgages at the time when the further advance was made by the mortgagee; or
if the mortgagee’s mortgage imposes on the mortgagee an obligation to make such further advances.”
Infrastructure Charges
There was a matter I touched on above to which I need to return. If the construction of Monaco had been accepted and that it was right to characterise the source of Aushome’s obligations to repay the amount of the payments to the builder as being something outside the ProLend Mortgage, it would have been necessary to consider whether the same could be said of the infrastructure charges.
Given the view I have reached as to the construction of the Deed of Priority it is strictly unnecessary to deal with this. However, the ProLend Mortgage obliged Aushome to pay all rates levied or charges for or in respect of the property: cl 9.1(a); and to pay all Taxes relating to the property: cl 9.1(b). The Planning Act 2016 (Qld) provides that any infrastructure charge levied “attaches to the premises”.6 The infrastructure charges accordingly are at least charges for or in respect of the land. Further the term Tax and Taxes are expansively defined as set out above and arguably capture the infrastructure charges. The ProLend Mortgage provides that Aushome indemnifies ProLend for all such taxes and charges. Accordingly, in my view the infrastructure charges would satisfy Monaco’s construction so as to fall in the scope of the expression (as it urged) of being an amount which may be debited to the account under the terms of the First Mortgagee’s Mortgage.
Summary
In my view the Deed of Priority operates so that the First Priority Amount would be calculated as the sum of the following:the amounts advanced by ProLend to Aushome (which the Court was told was $5,335,714.98);any costs, fees, charges, duties and expenses (including legal expenses) which are included in the Money Secured by the ProLend Mortgage; the whole of the sums paid to the builder and to the council as infrastructure charges which are included in the Money Secured by the ProLend Mortgage; such interest on those amounts as are included in the Money Secured by the ProLend Mortgage.
The relief granted below, by Orders made 30 September 2025, should be set aside. On 9 December 2025 further Orders were made by the primary judge reciting an interim arrangement between the parties and ordering the distribution of the amounts in a controlled money account as between the appellant and the first respondent. That order has been stayed. It follows from my reasons that these Orders should also be set aside.
Given that the appellant has been successful in my view it ought to have the costs of the appeal, the cross appeal and of the trial.
Accordingly, in my view the appropriate orders are:
The appeal is allowed.
The declarations made as Orders 1 and 2, and also Order 7, of the Orders made on 30 September 2025 are set aside.
The Orders made on 9 December 2025 are set aside.
It is declared that on the proper construction of the Amended Deed of Priority made by the appellant, the first respondent and the second respondent and bearing date 13 October 2021, the “First Priority Amount” when that expression is used in clauses 2.2(a) and 2.2(b), is the sum of the following:
the principal amounts advanced by the appellant to the second respondent in the amount of $5,335,714.98;
any costs, fees, charges, duties and expenses (including legal expenses) which are included in the Money Secured by the Mortgage granted by the second respondent to the appellant;
the sums paid to the builder or others under the building contract identified in the Builders Side Deed bearing date 4 June 2021 between the appellant, the second respondent, Skerman Civil Pty Ltd and Civil and Water Design Pty Ltd, and the sums paid to the Logan City Council as infrastructure charges pursuant to the Charge Notices dated 27 October 2017 identified as notices 11498152 and 11498183 which are included in the Money Secured by the Mortgage granted by the second respondent to the appellant;
interest on those amounts as are included in the Money Secured under the Mortgage granted by the second respondent to the appellant.
The proceedings are remitted to the Supreme Court for orders to be made for the distribution, consistent with the above declarations, of the monies held in the controlled money account identified in the Order of 9 December 2025, unless within 7 days the appellant and first respondent agree to a form of such orders to be made by this Court.
The first respondent pay the appellant’s costs of the appeal and of the cross appeal, and its costs of the trial.
At the conclusion of the appeal Mr Handran KC, for the appellant, indicated ProLend may wish to be heard on costs and in particular on seeking a certificate of some nature in respect of the appeal or the first respondent’s cross appeal.7 Given the orders made it is unnecessary to make any directions to further deal with this possibility.
HENRY J: I agree with Doyle JA.
Monaco Solicitors Pty Ltd v Prolend Solutions No 50 Pty Ltd [2025] QSC 119 (Reasons or R), with Orders made 30 September 2025 and 9 December 2025. ↩
Correcting for an obvious error in the notice of appeal. ↩
Service requirements are set out in clauses 6.1, 6.2 and 6.3. ↩
Though this is already provided for in the ProLend Mortgage at cl 30.1. ↩
See Beachquest Pty Ltd v Interstate Mortgage and Investment Pty Ltd [2003] 2 Qd R 586 at [32]-[33]. ↩
Section 118(12) of the Act when initially enacted but carried forward in s 119(12) of the current Act. ↩
Noting however that the ability to seek certificates under the Appeal Costs Fund Act 1973 (Qld) for civil appeals was abolished in 2023. ↩
ProLend Solutions No 50 Pty Ltd
Monaco Solicitors Pty Ltd [2026] QCA 68
(2015) 256 CLR 104
The appeal was allowed. The declarations in Orders 1 and 2, and Order 7, made on 30 September 2025, and the Orders made on 9 December 2025, were set aside. The Court declared that the First Priority Amount includes the principal amounts advanced of $5,335,714.98, qualifying costs and other amounts included in the Money Secured by the ProLend Mortgage, the relevant builder and infrastructure payments included in that Money Secured, and interest on those amounts. Distribution orders were remitted to the Supreme Court, subject to the stated opportunity for the parties to agree on their form. Monaco was ordered to pay ProLend’s costs of the appeal, cross-appeal and trial (para 70).
Accordingly, ProLend exercised its step-in rights, took over and completed the works. In the course of doing so it paid substantial sums to the builder and a sum of $1,925,161.60 to the local authority for “infrastructure charges” which it was necessary to pay to secure the release of the sealed plan of subdivision. The total of these sums is said to be either $6,304,726.95 or $6,307,861.84: R [47].
Thereafter, having registered on 22 June 2023 the survey plan, ProLend commenced selling 69 subdivided lots. It seems safe to infer from the existence of the dispute between the parties that the proceeds or anticipated proceeds are insufficient to pay both Mortgagees in full, so as to highlight the relevance of the priorities issues between them. This was confirmed on the hearing of the appeal.
As will appear below, there are issues about whether particular sums (and essentially these are the payments made by ProLend to the builder under the Step-In Deed and the infrastructure charges paid to the local authority) are part of the sum to which ProLend is entitled to first priority under the Deed of Priority. It is accepted, however, by Monaco that all these sums are properly payable by Aushome to ProLend and that all of them are secured under the ProLend Mortgage. The issue is whether they are to be paid to ProLend in priority to Monaco.
But there are aspects of his Honour’s reasoning which cannot be accepted.
First, whilst in one sense, by stepping in ProLend assumed a risk arising from cost overruns or delays in the completion of the work, that was a predictable risk. It is enlivened only if the borrower defaults. It can be expected that there will be some risk to the lender if it does nothing (and allows the land to be sold under developed) but also some risk if it steps in to cause the works to be carried out. Because of these risks the mortgagee required that its security extends to payments it might have to make. It is not a risk first assumed only when the step-in rights are exercised.
Secondly, the effect of ProLend stepping in is not that Aushome ceases to be responsible to pay the builder. Other provisions allow ProLend to require the builder to novate the Building Contract to a third party: cl 5.4(b)-(f) but that has not occurred here. Clause 5.6 allows ProLend to step out from the Building Contract whenever it gives the builder a notice and thereafter neither ProLend nor the builder owe obligations to the other under the Building Contract. It would be surprising if the Builder was left with no obligations owed to it by Aushome and that is such an uncommercial construction that it would require clear language to bring that about. Additionally, cl 6 is inconsistent with the notation that after ProLend steps in Aushome is freed of its obligations to the builder as it refers to Aushome authorising ProLend to apply any sums it is obliged to advance to Aushome under the Mortgage for payment to the builder “on account of money which [Aushome] is due to pay to the Builder under the Building Contract”.
But these considerations aside, Monaco’s contention remained that in context the expression “any other amount which may be debited to the account under the terms of the First Mortgagee’s Mortgage” does not include these particular sums even though they are Secured Money under the ProLend Mortgage and even though they are payable by Aushome to ProLend.
The matters which are relied on for this construction are related but are as follows.
First, there is a distinction drawn in the Deed of Priority between the money secured by the ProLend Mortgage and the First Priority Amount. This is clear from cl 2.2(b) and to be inferred from the Deed of Priority not simply referring to the Secured Money as defined in the ProLend Mortgage to identify ProLend’s first priority.
Second, that similarly the Deed of Priority differentiates between two things which are both monies secured by the ProLend Mortgage one of which is the First Priority Amount and the other is the entitlement to a third priority under cl 2.2(b)(iii).
Third¸ it is urged that the Deed of Priority serves no purpose, or at least not as a deed governing priorities, if the First Mortgagee is afforded priority for all sums which are moneys secured under its Mortgage and such construction makes no commercial sense.
These first three propositions are in substance submissions that the parties could not be understood to have intended a construction where the provision for divergent priorities is otiose because any sum which is part of the Secured Money under the ProLend Mortgage is per force of that also one of the parts of the components of the First Priority Amount. The premise of this proposition is something to which I shall return.
Fourthly, it is submitted that not all sums which are Secured Money under the Mortgage can be said to be sums “debited to the account under the terms of the [ProLend] Mortgage” within the meaning of the definition of First Priority Amount. Without seeking to explore the limits of this distinction, Mr Cheshire SC for Monaco submitted that sums (such as the payments to the builder) have as their source of the obligation on Aushome to make the payment to ProLend, not the terms of the ProLend Mortgage but some other document (the Step-In Deed). Thus, I understand it to be argued the sums are debited to an account under the Step In-Deed rather than the ProLend Mortgage even if by force of being a sum owing under the Step In-Deed they become part of the Secured Money under the ProLend Mortgage. I will consider this approach in principle before turning to consider how it applies to the infrastructure charges and also how it applies when read with cl 6 of the Step In-Deed.
Fifthly, Monaco also urges that the short term nature of both Mortgage loans meant it was not within the parties’ objective contemplation that significant further sums would be needed for or expended upon the development of the land. But this at best is a neutral consideration. It may be that as a result a common sense commercial approach may be to include any such money expended in the first priority because it was unlikely to be substantial. It does not follow that to do so is such an affront to commercial sense as to be a factor pointing against the construction urged by ProLend.
These propositions are likely to include some of those the primary judge had in mind (and adopted) when stating that the sums paid to the builder and for the infrastructure charges “were not … amount[s] that could be debited to the account of Aushome under the terms of the Prolend loan”: R [53].
However, for the following reasons I do not consider that to be the correct construction.
First, when the Deed of Priority was made (and amended) it is far from clear that the parties were not contemplating that there might never be a third tier of entitlement for ProLend such that the distribution of enforcement proceeds would simply reflect the sequence of the registration of the Mortgages. That is, the argument that the Deed of Priority may not in fact operate to regulate priorities was at least a contemplated likely position.
The First Priority Amount in the schedule (the stated dollar figure) was never lower than the Principal Amount to be advanced to Aushome, and by the time of the amendment to the Deed of Priority it was $200,000 greater than the Principal Amount. Monaco does not dispute that in addition ProLend was entitled to priority for at least interest, costs, fees, charges, duties and expenses (including legal expenses) which may be debited to the account under the terms of the First Mortgagee’s Mortgage; plus something else (and the scope of this is in dispute) being any other amounts which would fall within the third category of sums in the definition of First Priority Amount on Monaco’s limited construction.
The ProLend Mortgage required interest to be paid each month, as well as providing for some prepayments. It was entirely within contemplation, when the Deed of Priority was made, and when it was amended, that ProLend could get full priority for all sums owed to it.
Second, the Deed of Priority does not merely contain the cascading provisions for distribution of enforcement proceed as set out in cl 2.2. Aushome is a party to it as well. It contains clauses which are directed to matters other than priorities. They include the following:By clause 2.4, all parties acknowledge and agree that money which is contingently payable and secured by the Mortgage, for the purposes of the Deed of Priority is to be treated as a debt presently ascertained and immediately payable.Clauses 4.1 and 4.2 prescribe notice requirements3 for occurrences of lending, changes or events of default. In the latter circumstance, cl 4.3 provides for the Monaco to have a right of redemption of the ProLend Mortgage.By cl 4.6 each Mortgagee is given the liberty to provide information to the other mortgagee in relation to, among other things, mortgagor, the mortgage and any debts owing to them.4By cl 7.1 ProLend agrees to assign and transfer its Mortgage (including its rights under the Step-In Deed) to Monaco through a Deed of Assignment and payment of valid consideration. By s 94 of the Property Law Act 1974 (Qld) Monaco would likely have the right to require the ProLend Mortgage to be transferred to it: Sucrogen Australia Pty Ltd v Westpac Banking Corporation [2012] 2 Qd R 175. A like provision is now in s 132 of the Property Law Act 2023 (Qld). But, absent the terms of the Deed of Priority, this right would not likely extend to the Step-In Deed. The Deed of Priority puts this beyond doubt.
Third, the language used in the definition of the First Priority Amount is broadly expressed. It starts with a stated dollar figure: the amount specified in the Schedule. The primary judge treated this as something of a silo and construed the aggregate First Priority Amount in this case as being that stated figure (even though ProLend has made actual advances excluding the payments under the Step-In Deed and the infrastructure charges of only $5,335,714.98) plus interest on that lower figure of $5,335,714.98). There was imbedded in the stated schedule figure a ‘bonus’ as it was called below, of the difference of $3,095,162.02: see Order of 9 December 2025.
This is the approach urged by Monaco. But it treats the stated dollar figure component of the definition of First Priority Amount as available to capture sums which are not tethered to the words “which may be debited to the account under the terms of the First Mortgagee’s Mortgage” in the same way Monaco urges those words to be read in relation to the other categories of sums referred to in the definition of First Priority Amount. Linguistically, that it is an unattractive construction. It requires it to be concluded the parties set out to draw a fine distinction by use of language unsuited to achieve that objective.
Fourth, the expression “amounts which may be debited to the account under the terms of the First Mortgagee’s Mortgage” does not seek to identify the source of the obligation or occasion for the expenditure or for the advancing of money, but merely that it is something which may be debited (to Aushome) under the terms of the ProLend Mortgage. The Mortgage does not contain any provisions which identify a particular account to which sums are debited from time to time. There is no provision for a running total to be maintained. The terms of the ProLend Mortgage (as is common with many mortgages) identified an obligation to pay the Secured Money (Schedule A cl 8(a) and the common terms cl 3.1-3.5) and that that sum is charged over the land: cl 2.1. As I have set out above the expression Secured Money is expansively defined and would capture all of the sums in issue in this appeal. The language points to the test of whether an amount is one debited to Aushome under the terms of the ProLend Mortgage as being whether the sums can be added to the Secured Money and thus secured on the land and which under the ProLend Mortgage Aushome is obliged to repay it. It follows that when in the Deed of Priority reference is made to sums debited under the terms of the Mortgages it is merely identifying that the Secured Money is augmented and not that the covenant which gave rise to Aushome’s initial obligations to pay it can be found in the ProLend Mortgage.
Fifth, the redundancy of cl 2.2 of the Deed of Priority urged by Monaco is in any event not made out. Returning to the core provision, namely the definition of First Priority Amount, it provides for three components: the dollar amount specified in the Schedule ($8,430,877); plus interest, costs, fees, charges, duties and expenses (including legal expenses) which may be debited to the account under the terms of the First Mortgagee’s Mortgage; andany other amount which may be debited to the account under the terms of the First Mortgagee’s Mortgage.
These three categories are to be read harmoniously. The second and third are in addition to the first (the word ‘plus’ makes this clear). To read them harmoniously requires or at least strongly suggests they deal with different things albeit all amounts which Aushome must pay to ProLend.
In my view the first of these is intended to describe something other than the sums captured in the second and third categories. For want of a better description I would describe these payments as advances of principal by way of loan. This is evident from the parties having differentiated between a dollar figure and the other two categories (costs, fees interest and so on). Some further (minor) support for this is to be gleaned from the context that when first executed, the Deed of Priority identified a dollar figure which matched the total loan amount of the ProLend Loan. That said, the direct link is broken by the requirement that some of the principal was to be withheld as interest payments and also that the amended Deed of Priority no longer maintained that symmetry. But nonetheless, it is still an advance of the principal even if in this case part of that principal is directed to be applied for interest (or other things) and not to progress the works.
As already explained even the stated dollar sum is only given priority to the extent money has been advanced so as to be debited to the account for Aushome under the terms of the ProLend Mortgage. To be given any priority the sum must first be a sum owed by Aushome.
But conversely, if a principal sum greater than the stated dollar figure is advanced to Aushome, the excess cannot be included in the first category of the components of the definition of First Priority Amount. It does not fall into the second category. To read the definition in a harmonious way the amount of that excess cannot be caught up in the third category. That is because it is not any other amount, but rather an amount of the very kind already limited by the scope of the first category.
That being so, there do exist circumstances in which the Secured Money may exceed the First Priority Amount so as to give content to the stipulation of the first and third priorities in cl 2.2(b).
Monaco contends that it cannot be concluded this is what business people would understand the Deed of Priority to mean because it does no more than is provided for by the law in s 82 of the Property Law Act 1974 (Qld) (now in a modified form s 126 of the Property Law Act 2023 (Qld)).5 That section provided for when a further advance made by a first mortgagee could be made so as to rank in priority to a second mortgagee’s rights. Those circumstances were: