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ARTICLE · 10 SEPTEMBER 2026

What A Deed Of Priority Really Protects When A Development Collapses

Bennett & Philp Lawyers
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A Queensland Supreme Court case demonstrates how a poorly drafted deed of priority left a lender unable to recover $32.3 million in development completion costs ahead of a junior lender's debt. The decision reveals critical gaps in standard priority deed language when a developer collapses and a mortgagee must fund completion from their own resources.

AustraliaFinance and Banking
Nigel Hsieh
Nigel Hsieh
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A lender spent $32.3 million to step in and complete a property development after the developer went into liquidation. The deed of priority the lender had signed with another lender failed to protect that spending, and it ranked behind the other lender’s debt. That is the outcome in the case of JSY Securities Pty Ltd v Dakabin Homes Pty Ltd [2026] QSC 106 (‘JSY Securities Pty Ltd v Dakabin Homes Pty Ltd’).

The case is a useful read for any private lender who relies on a deed of priority. It shows how easily the drafting of a deed of priority can fail to address the one scenario that matters most: what happens when the developer collapses, and someone has to fund completion out of their own pocket.

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