Penny is the registered proprietor on the certificate of title of a house in St Kilda. On 1 June 2012 Penny borrowed $50,000 from Alfred to purchase the St Kilda house. This loan was insufficient to purchase the house. On 10 June 2012 Penny borrowed $200,000 from Vertigo Bank Ltd, using a mortgage over the St Kilda house to secure the loan. On 12 June 2012 Vertigo Bank Ltd registered their mortgage. Penny borrowed a further $50,000 on 1 July from Stacey to landscape the garden and purchase modern appliances for her new house. Stacey lodged a caveat on the title of the St Kilda house on 5 July 2012 to protect her interest.
Penny defaults on her loan to Vertigo Bank Ltd. Advise Vertigo how the proceeds of sale of the St Kilda property would be divided between Penny’s creditors. Refer to relevant legislation.