Question

Bruce Zhang was the registered proprietor of lot 12 in SP79307 (attached). Bruce didn't drive and so in 2010 he agreed to sell his parking space in a brick garage behind the apartment building to Noushin Baker. Bruce and Noushin signed a contract containing the essential terms and Noushin paid Bruce the $20,000 purchase price. Noushin used the parking space when she was at work nearby.

In 2019, Bruce moved into a nursing home and gave his apartment to his daughter Felicity, who became the registered proprietor of lot 12. She wanted to use the apartment as security for a loan to start an ethical make-up business with her friend Vanessa Vargas.

Felicity negotiated for a loan of $500,000 from Bligh Bank, providing them with a business plan, as well as Vanessa's business credentials. The bank's solicitor, Daniel McEvoy, asked Felicity to come to his office with her passport and drivers licence so that he could verify her identity and keep the appropriate records. Felicity did so and the bank's mortgage was registered on 1 July 2019.

By May 2021, the business was struggling, and Vanessa could not pay the rent on her house. She rang Bligh Bank and spoke to Daniel McEvoy explaining their difficulties. She told Daniel that Felicity had asked her to arrange for a further $300,000 loan, using Felicity's apartment as security. Vanessa said she would bring in a mortgage document that Felicity had signed. In fact, Vanessa had not asked Felicity but thought a further loan was the best thing to do. She had become frustrated with Felicity's caution in business matters, so she signed Felicity's signature on the mortgage document. Daniel thought it was odd that Felicity had not spoken to him, but he knew Vanessa was her business partner, so he arranged for the money to be deposited in Vanessa's personal account and he registered a second mortgage over 12/SP79307 securing $300,000.

Felicity made repayments on the $500,000 loan every month and Vanessa initially did the same in relation to the $300,000 loan. However, the business continued to go badly and by early 2022, Vanessa told Daniel she could not make any more repayments. Daniel was worried that he might get in trouble with his boss, Yung, for registering the second mortgage without checking with Yung first, and so Daniel decided to transfer the second mortgage to his brother, Jake, to stall for time. He told Jake that it was just a technicality. Jake became the registered proprietor of the second mortgage.

By late 2022, with a heavy heart, Felicity accepted that the business was not viable. She decided to sell the apartment and repay her loan. First, she spoke to Noushin and told her that whatever arrangement Noushin had with her father would have to end.

Felicity then contacted Bligh Bank and spoke to Yung about what she needed to do to sell her apartment and repay her loan. Yung asked her about the second mortgage to Jake McEvoy and Felicity said she knew nothing about it. Yung did some investigations and realized that something was very amiss. He gave Felicity the details and advised her to contact a lawyer.

The task requires the write whom works for a senior partner in the firm that Felicity consults. She asks you to write her a memo setting out what rights Felicity or others may have in relation to 12/SP79307. I need help identifying all relevant legislation - as well as writing this memo.