It then continued:
"On 24 July 2003 the registered proprietor to the various properties covered by this caveat entered into an agreement for the sale of the various properties to the caveator. The caveator is seeking specific performance of that agreement."
15 The caveat was lodged, I think, about 16 January 2004 or shortly thereafter.
16 On 17 February 2004 the plaintiff filed a statement of claim. The statement of claim, with great respect to those who drafted it, is an unusual document. The principal prayers for final relief are that there be a declaration that the agreement on the Letter of Offer and the Letter of Intent constitute a valid enforceable contract to sell the land, and an order for specific performance. However, earlier on, the pleader says that from 15 August 2003 the defendant has refused to execute a Put and Call Option pursuant to the terms of the agreement to purchase the properties. However, no relief, such as was granted in Niesmann v Collingridge (1921) 29 CLR 177 is sought to compel the entry into a Put and Call Option.
17 The transaction is strange in that it would appear on one version of the documentation that the plaintiff was never ever to purchase the property, but was to be some sort of conduit so that the defendant would be compelled to sign a transfer by direction to the ultimate purchaser after the on-sale, and that the only interest that would flow to the plaintiff would be the commission. Indeed, when one looks at the correspondence between the solicitors leading up to the stymie on the Put and Call Option that appears very clearly.
18 If that were the arrangement between the parties, then it would seem to me more probable than not that that arrangement is not one which gives the plaintiff an interest in land to support a caveat. It is rather in the same position of a person who has an interest, for instance, in the proceeds of land when sold, rather than a person who has an interest in the land itself; see eg Shepherd v Houston [1927] SASR 144.
19 However, there is other evidence to suggest that the plaintiff is a real purchaser and may have a specifically enforceable contract. The material to date does not convince me on the balance of probabilities that that is so, but it does seem to me that there is sufficient to show an arguable case that that is so.
20 Section 74K of the Real Property Act 1900 confers power on the court to extend a caveat if the caveat has, or may have, substance. There was quoted to me my decision in Jensen v Giugni (1994) 6 BPR 13,667, to justify the proposition that there is a very slight onus on the caveator to show an arguable case. The proposition is, I think, correct, but Jensen v Giugni is not an authority I would cite for the proposition.
21 One has to consider all the circumstances of a case when making a decision as to whether a caveat may have substance under s 74K. There will be many situations where the application is made at a time when the majority of the facts have not yet been resolved. In such a situation the court may, if it is only considering an extension for a little while, accept very little material before it holds the status quo. However, the present case is not in that situation.
22 There were read to me about ten affidavits from the various parties and although a formal defence has not yet been filed, the parameters of the issues between the parties are fairly well mapped out and basic facts have also come to light. Under those circumstances the court has more material than usual on which it can judge whether the caveator's claim may have substance.
23 As I have said, I think that, on the test, the caveat may have substance because it is arguable that this is a contract for the sale of land and that normally would lead to an order for specific performance.
24 I have gleaned from the submissions of Mr Dodson for the defendant that there will be a whole host of matters put by way of defence. First of all, that there is no interest in land created by the documents. Secondly, that on their proper construction there is no formal contract because the document was only a provisional document between the parties and falls the wrong side of the line for the plaintiff of the case of Masters v Cameron (1954) 91 CLR 353.
25 Thirdly, there is evidence that Mr and Mrs Vukmirica entered into the arrangement without any legal assistance and not knowing what they were signing, so that either of the non est factum defences may be available to them, or there may be an equitable defence that it would be unconscionable, when the plaintiff knew about this, for it to be given specific performance, or even damages.
26 Fourthly, there is a question as to whether the documents were ever signed in a way so as to bind the defendant company. Fifthly is a question as to whether the entry into the Put and Call Option was such that it fails for uncertainty because the terms of the Put and Call agreement were never made plain.
27 Sixthly, there may be a defence that there has not been a proper compliance with s 54A of the Conveyancing Act and the question of delay was also raised.
28 Many of those defences can only be dealt with on a final hearing, as they will involve questions of fact, but it does seem to me that there is at least an arguable case.
29 However, when one looks at the balance of convenience one has to consider both sides. The plaintiff needs to have its right to purchase, if that be its right, protected, but, on the other hand, the defendant needs to have the strata plan registered and to be protected against damages for delay, because it is paying, as is clear to both sides, some $20,000 per month in interest while the delay goes on.
30 The caveat as framed is too wide in that, in my view, it operates even to stop a strata plan being registered. The caveat, if it is to be extended, should be modified to allow that plan to be registered, as it is in everyone's interest that it be registered.
31 I also consider that in view of the inaccuracy of s 74P of the Real Property Act, there must be an undertaking as to damages. As I have said, the plaintiff is a trustee company and, as such, apart from the right of the trustee to be indemnified by the beneficiaries of the trust (and there is not much evidence as to who they are, or as to their means), it has no assets at all.
32 I was offered an undertaking by two other companies in the plaintiff's group Ocean Heritage Pty Ltd and F M W Investments Pty Ltd, to join in the undertaking as to damages. The court does not accept undertakings as to damages from non parties, but if persons who claim no relief are joined in the proceedings, in order to give the undertaking as to damages, that is acceptable (see Select Personnel Pty Ltd v Morgan & Banks Pty Ltd (1988) 12 IPR 167, 172).
33 However, there is not much evidence as to whether these companies do have any assets of their own beneficially. There is some evidence to show that lending institutions are prepared to advance them moneys, but whether this is because of directors' guarantees, or otherwise, I do not know.
34 Accordingly, at this stage it seems to me that the only way I can keep the balance of convenience is by ordering a bank guarantee. The amount of that guarantee is to be $30,000 which will cover one month's interest, plus some buffer against there being a sale at a loss because of the delay.
35 I have fixed that sum on the basis that the case will be determined some time in early April. If that is not the case, then I would consider that it would be appropriate to increase the guarantee by $30,000 per month until the case is heard. In order to accommodate that, I should extend the caveat until further order, but give the defendant liberty to move under s 74MA of the Real Property Act, on or after a day about a month's hence, to lift the caveat and, as at presently advised, I would lift the caveat, unless the bank guarantee was increased.
36 However, it is better to make directions for the ongoing hearing of the matter and let whoever is the judge who hears the next round of these proceedings make whatever order is appropriate at that time.
37 I should note that the caveat was already extended by Windeyer J until yesterday and I extended it overnight because I needed to consider the form of order and these reasons.
38 However, I adhere to what I said in McCosker v Lovett (1995) 7 BPR 14,507, that once the caveat is extended then it is necessary for the lapsing process to be recommenced, and it is really not necessary to make further orders of extension. That is why ordinarily these days the court extends the caveat until further order and takes an undertaking to the court from the plaintiff that it will remove the caveat if the court is of the view that the caveat should no longer be in force. Presumably because of the haste in which this matter was dealt with the ordinary process was not followed.
39 As I said, I made observations as to the result of the case last evening and I am glad to say that counsel have prepared short minutes which reflect those orders and indeed improve upon them.
40 Accordingly, I make the orders in accordance with the short minutes, which are to carry out my orders, rather than being consent orders. Those short minutes include directions, and I stand the matter over to the Registrar's list on 6 April 2004.
41 Exhibits DX04 and DX05 may be returned. The balance are to remain.