n 2010, Blair contracted to buy an apartment on Macquarie St in the CBD. She borrowed $700,000 of the $950,000 purchase price from Bridge Finance. After settlement, Bridge Finance put the signed transfer from the vendor, a signed mortgage from Blair and the certificate of title in their 'settlements' filing cabinet. It was their practice at the time to register mortgages in batches, every six months. They did not lodge a caveat. In 2012, Blair wanted to borrow more money to renovate the kitchen, but she knew that Bridge would not allow her to increase her mortgage debt. She approached Radical Loans, because their director, Dan, was best friends with Blair's boyfriend, Chuck. Radical lent Blair $200,000, executing a contract of mortgage. Radical did not lodge a caveat. Six months later, Blair borrowed a further $100,000 from Chuck. Blair told Chuck that it was just a short-term loan until her allowance came through from her father. Blair wrote on the back of an envelope, "If I don't pay you back the $100,000, Chuck darling, you can have my Macquarie St apartment. It's worth a million. Blair. XOXO" Ever the cautious businessman, Chuck filed the envelope carefully with his other finance documents. Blair has now defaulted on all of her loans. The CBD apartment market has taken a sharp downturn and Bridge, by now the registered mortgagee, sells Blair's apartment for $800,000. How should the proceeds of sale be paid out