Matt purchased an apartment in Caulfield for $800,000 and settlement took place on 15 March 2018. To pay the purchase price, Matt used his savings of $200,000 to pay for the deposit and a further $100,000 in savings to pay part of the purchase price. He then borrowed $500,000 from Bravo Bank Ltd to pay the balance of the purchase price. On 15 March 2018 after the settlement, Bravo Bank Ltd transferred the certificate of title of the apartment to Matt's name and registered its mortgage on the certificate of title.

Matt's career is prospering and his salary increases. In March 2019, he decided to build an extension using the equity in his Caulfield apartment. Matt entered a loan agreement with Big Bank Ltd for $100,000 mortgaging his Caulfield apartment. The money was advanced to Matt on 12 March 2019. However, Big Bank failed to register the mortgage in the certificate of title.

In May 2019, Matt decided to purchase a yacht for which he took a loan of $100,000 from Small Bank. Matt and Small Bank Ltd entered into a loan agreement on 15 May 2019. Small Bank registered their mortgage on the certificate of title on Matt's apartment on 23 May 2019. On 20 May 2019, Matt borrowed $10000 from Alex. Alex registered his interest on 20 May 2019.

By August 2019 Matt's career suddenly hit a wall and he lost his job. A tough job market saw Matt unable to obtain a job and fall behind on his two mortgage repayments. Arrears and penalty interest accrue on his two mortgages and he now owes the original amount of the loan. On 20 February 2020, Bravo Bank Ltd decides to initiate recovery of its outstanding debt of $500,000. Big Bank Ltd and Small Bank is owed $100,000 each. To make matters worse, Bravo Bank Ltd obtained an independent valuation of the Caulfield apartment its value has decreased and is valued at only $580,000.

Advice Bravo Bank on the priorities of different lenders and how the proceeds of sale would be distributed.