CAPE Law Unit 2 · 2005 · Paper 2 · Question 8(a)

In January 2002, Cain secures a loan from Gimme Bank by offering his registered title to 15 Ragabuffing Bay. In February 2002, the bank lodges a caveat/caution protecting its equitable mortgage. In March 2002, Cain sells the land to Abel, who moves in and builds a house. Cain defaults in December, and the bank claims its equitable mortgage takes priority over Abel, who held stamped transfer documents awaiting title release and did not know of the caveat.

Explain the legal effects of the bank lodging a caveat or caution against 15 Ragabuffing Bay.