10 Clearly, so far as admissibility is concerned, the problem could be cured under s 304. But would that cure the problem under s 211? In my view, it would not. I shall explain why.
11 If clause 9 is to create a caveatable interest it must be (as Mr Oliveri acknowledged in the course of argument) because it operates, at least in equity, as a mortgage or charge. If, and to the extent that, it so operates, then it is a mortgage as defined by s 205 of the Duties Act. It does not fall within any of the exemptions from stamping set out in Parts 3A and 4 of Chapter 7 of the Duties Act. Thus, prima facie (and Mr Oliveri did not submit to the contrary), it was required to be stamped in accordance with the provisions of Part 2 of Chapter 7.
12 Not having been stamped, the consequences prescribed by s 211 must follow. A mortgage that is required to be stamped is enforceable only to the extent of the amount secured by it on which duty has been paid. In this case, no duty having been paid, the relevant amount, for the purposes of s 211(1) is zero.
13 There appears to be some lack of authority on the point. Indeed, Mr Oliveri submitted that he had been involved in many such matters and that the point had never been raised. That may, perhaps, reflect the fact that no one has yet sought to take it. In any event, the matter was considered (although obiter) by Young CJ in Eq in Neoform Developments and Interiors Pty Limited v Town and Country Marketing Pty Limited [2002] NSWSC 344. There were a number of points taken in that case, including one as to s 211 of the Duties Act. His Honour noted at [29] that the point had not been fully argued before him. But, in circumstances where the mortgage with which his Honour was concerned had not been stamped with mortgage duty (which is also the case in the matter with which I am concerned today), his Honour concluded that the mortgage was not enforceable. Specifically, his Honour said at [31], not only was the mortgage unenforceable but the particular provisions of s 211 applied over the general provisions of s 304. The latter section, his Honour said, "gives way in the case of mortgages".
14 Further, as his Honour pointed out at [32], the relevant date for assessing enforceability was the date the caveat was lodged. The mortgage not having then been stamped, his Honour said that it would seem "that in any event the caveat could not be supported".
15 In my respectful opinion, that is the approach to be taken to the section. The starting point is, as I have pointed out, that if the provisions of clause 9 are to create a caveatable interest it must be because they operate as a mortgage or charge. Therefore, s 205 of the Duties Act attracts the obligation to stamp. A failure to stamp attracts the operation of s 211. There is no point in standing the matter down to enable the mortgage to be stamped because that would operate to make it enforceable from the date of stamping. Even if this were incorrect (and under the Stamp Duties Act, 1920, it appears that late stamping may have validated an instrument ab initio - see McKensey v Hewitt [2004] NSWSC 636 at [11]) the question is to be assessed today in respect of the particular caveat lodged.
16 In circumstances where the matter was brought on urgently at the plaintiff's request, I do not see the interests of justice as requiring that the proceedings be adjourned, presumably with an order extending the operation of the caveat, so that the plaintiff can attend to its obligations under the Duties Act. Plaintiffs who wish to avail themselves of the caveat provisions of the Real Property Act, 1900, through mechanisms such as clause 9 of the agreement presently under consideration, should attend to their legal obligations expeditiously, and well in advance of any hearing to vindicate their rights.
17 In the circumstances, I hold that the provisions of clause 9, insofar as they constitute a mortgage or charge, are unenforceable. Being unenforceable (and there being no other source of any caveatable interest) it follows that the caveat is bad and that there is no point in ordering its extension. It follows in turn that the proceedings must be dismissed with costs and I so order.