MATTER : Section 138C of the Transfer of Land Act 1893

CHRISTINA MARGARET CHUGG as Executor of the Will of ROY MCKENZIE PATON

Caveats - Application to extend operation of caveat - Interest of purchaser under an uncompleted contract of sale - Identification of parties to the contract - Whether a contract including lot not registered in the name of the vendor is capable of specific performance

Property Law Act 1969 (WA), s 34

Transfer of Land Act 1893 (WA), s 137, s 138B, s 138C

Adderley v Dixon [1824] EngR 376; (1824) 1 Sim & St 607

Cruz & Anor v Osborne & Ors [1999] WASC 8

Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42

Dougan v Ley [1946] HCA 3; (1946) 71 CLR 142

Giliberto v Kenny (1983) 48 ALR 620

Hamdon v Widodo & Anor [2004] WASC 123

Hillary v Garvey [1965] WAR 103

J & H Just (Holdings) Pty Ltd v Bank of New South Wales [1971] HCA 57; (1971) 125 CLR 546

Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419

Lambly v Silk Pemberton Ltd [1976] 2 NZLR 427

Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444

The Earl of Durham v Legard [1865] EngR 655; (1865) 34 Beav 611

Tonelli v Komirra Pty Ltd [1972] VicRp 87; [1972] VR 737

Aitkin Transport Pty Ltd v Voysey [1990] 1 Qd R 510

Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129

Di Biase v Rezek [1971] 1 NSWLR 735

Dreverman v Doherty (1870) 1 VR (E) 4

Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95

Kingsley Subdivision Ltd v Feickert [1982] ANZ ConvR 284

Maroubra Pty Ltd v Murchison Queen Pty Ltd & Ors [2002] WASC 98

Midland Brick Co Pty Ltd v Welsh & Anor [2002] WASC 248

Rosser v Austral Wine & Spirit Co Pty Ltd [1980] VicRp 33; [1980] VR 313

Torantora v Palantinus [1966] WAR 14

Trifid Pty Ltd v Ratto [1985] WAR 19

Walpole v Jeanneret (1885) 2 WN (NSW) 43

Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387

Wright v Fenton [1925] St R Qd 256

1 JENKINS J: Pursuant to the Transfer of Land Act 1893 ("the Act") s 138C, the plaintiffs apply, by originating motion dated 6 January 2005, for the extension of a caveat.

2 On 27 October 2004, the plaintiffs lodged caveat numbered J65535 over the first defendant's land. The land is known as 43 Attfield Street, Fremantle. It is described as lot 66, on deposited plan 27895 and being the whole of the land comprised in certificate of title, vol 8, folio 112A as well as the portion of the Fremantle town lot 689 the subject of diagram 6698 and being the whole of the land comprised in certificate of title, vol 8, folio 113A.

3 The caveatable interest or estate claimed by the plaintiffs in the caveat is "an estate in fee simple as purchaser" which is stated to arise out of a contract for sale of land or strata title by offer and acceptance dated 30 August 2004 made between the first defendant, as vendor, and the plaintiffs, as purchasers.

4 The first defendant denies that the plaintiffs have a caveatable interest in the land. The first defendant required the second defendant to serve a notice on the plaintiff pursuant to the Act, s 138B. The plaintiffs then commenced these proceedings. The second defendant abides the decision of the court.

5 In August 2004 the plaintiffs and the first defendant negotiated the sale and purchase of 43 Attfield Street. In addition to the titles referred to above, 43 Attfield Street includes a small parcel of land known as lot 67 on deposited plan 27895 and being the balance of the land in certificate of title, vol 488, folio 122. Lot 67 is registered in the name of Mary Creamer McNeece, executrix of the Will of Benjamin Shemelds.

6 The plaintiffs claim that they inspected 43 Attfield Street with the vendor's agent, Ms Henshaw of Mark Brophy Real Estate. During the inspection they say they advised Ms Henshaw that they wished to make an offer to purchase the property.

7 After the inspection the plaintiffs claim that Ms Henshaw explained to them that the property was comprised of lot 66, lot 67 and lot 689, all of which were on separate certificates of title. They say that she produced copies of searches of the certificates of title for lot 66 and lot 689 and advised them that she had left the copy of the search of the certificate of title for lot 67 "back in the office". The plaintiffs say that Ms Henshaw produced a blank contract for sale of land or strata title by offer and acceptance and asked the plaintiffs which of them was to be named as purchaser on the form. The plaintiffs say that they told her they were buying it jointly. Ms Henshaw told them that if they changed their minds and wanted to register the property in either one or two names that they would then be liable for further stamp duty. She told them that she had been caught out in a situation like that previously and did not want it to happen again. She told them that if they made the offer in all of their names but with "and/or" between them they would not have that problem if they subsequently changed their minds. The plaintiffs say that they told Ms Henshaw that they did not need to do that because they had made up their minds that the three of them would buy the property jointly. They say that Ms Henshaw insisted that that was the best way to do it "just to be on the safe side".

8 They say that Ms Henshaw then wrote the contract in her own hand. The "BUYER" as stated on the contract is:

"MARC DOUGLAS EGAN and/or

CINDY MARIA MARTHA JOHNS and/or

GLENN ANDREW CARPENTER

of 6 Price St, Fremantle."

9 Each of the plaintiffs signed as "BUYER" and initialled the contract. The buyer's details were not changed prior to 29 August 2004, being the date the parties agreed on a price and the first defendant signed the contract as vendor of all three lots.

10 The plaintiffs say that on or about 20 September 2004 they were advised by their settlement agent that the certificate of title for lot 67 was not registered in the name of the first defendant. The plaintiffs then instructed solicitors to act on their behalf in respect to the purchase.

11 On 24 September 2004 the first defendant made application for possessory title in respect of lot 67 by application number J36515.

12 On 28 September 2004 the first defendant's solicitor wrote to the plaintiffs' solicitor stating that the first defendant suggested that settlement could follow the normal course with lot 67 being made available as soon as a new title was granted. The plaintiffs' solicitor replied by letter dated 1 October 2004 that the plaintiffs insisted that lot 67 be transferred to them at settlement in accordance with the terms of the contract. The letter pointed out that pursuant to the contract if the first defendant was unable to transfer the land to the plaintiffs free of encumbrances, the first defendant would be treated as being in default and the plaintiffs would be entitled to exercise every right of the purchasers arising from that default. The plaintiffs offered to complete settlement for a reduced price with the balance of the purchase price being paid once the new certificate of title for lot 67 had been issued in the first defendant's name. If settlement did not take place by settlement date, the plaintiffs advised that they would treat the first defendant as being in default of the contract and would claim compensation pursuant to the conditions of the contract.

13 Pursuant to the contract the plaintiffs paid a deposit of $5,000, obtained finance approval, executed a transfer of land in all of their names and submitted it to the first defendant. The first defendant did not execute the transfer. Settlement did not take place, as required under the contract, on or before 15 October 2004. The first defendant's solicitor advised the plaintiffs' solicitor that the contract was void for uncertainty in respect to the names of the purchasers. The first defendant's agent returned the deposit to the plaintiffs and re-advertised the property for sale. The plaintiffs then lodged the caveat.

Principles Governing the Extension of Caveats

14 The Act, s 137 provides that a person claiming any estate or interest in land may lodge a caveat forbidding the registration of any dealing affecting the claimed estate or interest. The purpose of a caveat is to act as a statutory injunction to the Registrar of Titles to prevent registration of dealings with the land until notice has been given to the caveator. This enables the caveator to pursue such remedies as he or she may have against any person lodging a dealing for registration: J & H Just (Holdings) Pty Ltd v Bank of New South Wales [1971] HCA 57; (1971) 125 CLR 546 at 552 per Barwick CJ.

15 The Act, s 138B provides that the proprietor of land in respect of which a caveat has been lodge may apply for the caveator to be served with a notice to the effect that unless the caveator applies to extend the operation of the caveat it will lapse within 21 days. The Act, s 138C provides that on the hearing of an application for the extension of a caveat this Court, if satisfied that the caveator's claim has or may have substance, may, amongst other things, make an order extending the operation of the caveat.

16 In an application under the Act, s 138C the onus is on the caveator to satisfy the court that the caveator's claim has or may have substance. This has been interpreted as an onus to satisfy the court that there is a serious question to be tried as to whether a caveatable interest exists. The caveator must also satisfy the court that the balance of convenience favours the retention of the caveat. However, if there is a serious question to be tried it will be an unusual case where the balance of convenience favours removal of the caveat: Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 at 50.

A Purchaser's Caveatable Interest under a Contract for Sale of Land

17 A person who does not have a legal estate or interest in land is only entitled to lodge a caveat if equity recognises that they have an interest in land. Equity recognises that damages are usually not an adequate remedy for failure by a vendor to complete a contract for the sale of land: Adderley v Dixon [1824] EngR 376; (1824) 1 Sim & St 607 at 610; Dougan v Ley [1946] HCA 3; (1946) 71 CLR 142 at 150 per Dixon J. Consequently equity will normally decree specific performance in respect to contracts to convey land: Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 at 478. The interest of the purchaser may also give rise to a caveatable interest in the land: Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419 at 432 per Malcolm CJ.

Identification of the Parties to a Contract

18 The first defendant says that there is no serious issue to be tried between the parties because it is apparent that the contract is void for uncertainty. The basis for this submission is that she says that there is uncertainty in respect to the identification of the purchaser or purchasers. The first defendant says that the failure of the contract to clearly stipulate the purchaser or purchasers is contrary to the requirements of the Property Law Act 1969 (WA) ("the Property Law Act"), s 34 which states that subject to the express provisions of the Property Law Act no interest in land is capable of being created or disposed of except by writing signed by the person creating or conveying the interest.

19 The plaintiffs submit that it is arguable that they have a caveatable interest in the land and that the balance of convenience favours the caveat remaining in place. They say it is arguable that the contract for sale of the land provides that each of them are a party to it with joint and several obligations to ensure that one or more of them completes the purchase of the land. In the alternative, if the parties to the contract are uncertain they submit that they should still be able to obtain specific performance of the contract on the basis of their part performance of it. Further, in the alternative, they submit that the first defendant's agent's representations give rise to an estoppel preventing the first defendant from denying the existence of a valid contract.

20 In support of her submission, the first defendant relies upon the dicta of Wolff CJ in Hillary v Garvey [1965] WAR 103 at 108 where his Honour, referring to the equivalent of s 34(1)(a) in the statute of frauds said:

"In order to satisfy the Statute there must be a memorandum in writing of the agreement between the parties. That means that all the terms must be found within the confines of the writing. Recourse to oral evidence to supply any term that is not covered or fully covered by the writing is not permissible."

21 However, the learned authors of Halsburys Laws of Australia, vol 6, Butterworths 1992 at [1160 - 2325] state that there is an exception to this rule in that parole evidence may be admitted to prove the identity of the parties to a contract. Authority for this proposition includes Giliberto v Kenny (1983) 48 ALR 620 where the High Court approved of the admission of extrinsic evidence to show that where the names of a wife and her deceased husband were included in a contract, the wife was acting as agent for her husband and herself. The learned author of "Voumard The Sale of Land" 5th ed Law Book Co, 1995 does not state any such general exceptions. However, at [2360] the author refers to many cases where for one reason or another the courts have admitted extrinsic evidence to prove the identity of parties to a contract relating to land.

22 The plaintiffs submit that in any event it is unnecessary to have recourse to extrinsic evidence. They say that they are all parties to the contract, as each of them has executed it, and they are bound to purchase the land or to ensure that one or more of them do so. The plaintiffs say that there are some similarities between the facts of this case and circumstances in which a purchaser is a named person and/or his nominees. In Lambly v Silk Pemberton Ltd [1976] 2 NZLR 427, the New Zealand Court of Appeal held that an agreement that A or B would buy from C would be void for uncertainty unless supplemented by something binding A or B. Further, if A agrees that he or his nominee will buy from B, prima facie there is a concluded contract binding A. The plaintiffs submit that because each of them is a party to the contract there is something which binds them all to it and it is not void for uncertainty.

23 In Tonelli v Komirra Pty Ltd [1972] VicRp 87; [1972] VR 737, Smith J of the Supreme Court of Victoria held that a contract for sale of land which provided that the land was sold to the plaintiff and his nominees was not void for uncertainty. His Honour held that those words were not intended to state the persons who were assuming the obligation of purchasers, but merely conferred a power upon the plaintiff to nominate the persons to whom, along with himself, the conveyance was to be made.

24 In my view it is arguable that a court hearing the plaintiffs' application for specific performance would find that the subject contract should be construed as an agreement between all three plaintiffs and the defendant, which includes a power on the plaintiffs to nominate which of them would be named as the transferees. Alternatively, the court may admit extrinsic evidence to prove that all three plaintiffs are purchasers under the contract.

25 Taking into account that at this stage I need only be satisfied that the plaintiffs' claim may have substance I find that there is a serious issue to be tried as to whether the plaintiffs have an equitable interest in the land as purchasers under the uncompleted contract for sale and purchase dated 29 August 2004. I do not accept the first defendant's submission that the contract is so obviously void for uncertainty that it does not give rise to an arguable claim by the plaintiffs that they have an equitable interest in the land. Having come to this view it is unnecessary for me to consider the plaintiffs' other arguments based on part performance and estoppel.

26 The defendant did not file any affidavit material. Thus there is no evidence before me which would warrant a conclusion that the balance of convenience lay in not extending the caveat.

27 At the hearing of the summons I raised two matters with the parties. The first was that the plaintiff had not commenced an action to obtain specific performance of the contract. The second was that the estate or interest claimed by the plaintiffs in the caveat is "in fee simple as purchaser". I have previously held that a purchaser under an uncompleted contract for sale of land is not correct to describe their estate or interest as being in fee simple. This being the most expansive and absolute of all the states: Hamdon v Widodo & Anor [2004] WASC 123. I directed that the parties file further submissions in respect to the second issue.

28 On 15 April 2005 the plaintiffs commenced an action by writ of summons for orders including an order for specific performance of the contract and "to that end an order that the defendant attend to all such matters as are necessary to transfer the land" to the plaintiffs. The land is described as being the three lots referred to earlier in these reasons.

29 The first defendant took the opportunity of the leave that I gave to the parties to file further submissions in respect to the adequacy of the description of the estate or interest claimed in the land to file further submissions in respect to whether the plaintiffs can obtain specific performance of the contract. By those submissions the first defendant submits that as the contract was for the sale of three lots, including lot 67, of which the first defendant is not the registered proprietor, the plaintiffs could not obtain specific performance of the contract. The first defendant says that when it is not possible to compel performance of a contract according to its terms the court will not allow either party to enforce it "unless the person who is prejudiced by the error be willing to perform the contract without compensation": The Earl of Durham v Legard [1865] EngR 655; (1865) 34 Beav 611 at 613 per Lord Romilly MR.

30 The plaintiffs were taken by surprise by the first defendant's further submissions. In response, they filed further submissions to the effect that I should not have regard to them. I agree that the first defendant's submissions go beyond what was encompassed by my direction with respect to the filing of further submissions. The first defendant should have requested that the matter be re-listed and then orally sought leave to file the submissions. Nevertheless they raise a matter which I am of the view that I can and should determine by these reasons.

31 As to the substance of the plaintiffs' responsive submissions, they say that I need merely be satisfied that their claim may have substance and the fact that the first defendant did not hold title to lot 67 at the time of sale does not exclude a claim to specific performance of the contract as being a claim that may have substance.

32 The plaintiffs refer to the fact that as at 24 September 2004 the first defendant made application to become the registered proprietor of lot 67 by way of adverse possession. The application and supporting statutory declaration are annexures to the affidavit of the third named plaintiff. The statutory declaration declares that to the first defendant's knowledge lot 67 has formed part of the backyard of 43 Attfield Street since 1966 and that her brother, who was the registered proprietor of lots 66 and a portion of lot 689 until his death, had been in exclusive occupation of lot 67 since 1966. The plaintiffs submit that if regard is had to the first defendant's statutory declaration in support of the application, there exists no reason to believe that the application to be registered as proprietor of lot 67 will not be successful.

33 The plaintiffs say that it would be open for the court under their claim for specific performance to order that the remaining lots be transferred to them and to order damages in respect to any failure to transfer lot 67. Alternatively, the court could order that the first defendant pursue the application for adverse possession. They submit that if pursuant to a contract A sells to B 1,000 lots of land, in respect of which A is the registered proprietor of all lots but one, B does not lose his right to specific performance to gain transfer of the 999 lots simply by reason that A is not the registered proprietor of one of the lots (albeit that A represented that he was). No authority is cited for this proposition.

34 In Dougan v Ley (supra), the High Court dismissed an appeal from the Supreme Court of New South Wales. At trial, the plaintiff purchasers obtained specific performance of an agreement for the sale of a taxi-cab to them. The appeal to the High Court alleged that the agreement was not appropriate for specific performance as it was subject to the purchasers obtaining the consent of the Commissioner of Road Transport and Tramways to the transfer. The trial Judge had ordered, in addition to specific performance, the defendant to do all things and execute all documents which were proper and necessary for him to do and execute to enable the plaintiffs to present a proper application to the Commissioner. His Honour further decreed that in the event of such an application being successful the agreement be specifically performed.

35 A majority of the High Court found that such orders did not require the court to supervise a series of acts. Neither did they purport to control the Commissioner's discretion. In the event of the Commissioner's refusal the obligation would be at an end. Dixon J, at 152, said that the conditional form of decree accorded with settled practice in Australia, where a contract to be specifically performed involved obtaining the consent, approval or other sanction of a public authority.

36 In Kuper v Keywest Constructions Pty Ltd (supra) at 430 - 432, Malcolm CJ reviewed various and sometimes conflicting authorities which deal with whether a purchaser under a contingent contract for sale of land has a caveatable interest in land. He concluded that notwithstanding the conditional nature of the contracts in his case (they were conditional upon the registration of a strata plan) the purchasers had an estate or interest sufficient to ground a caveatable equitable interest.

37 Whilst I acknowledge that the facts of this case are different from the facts of Dougan v Ley (supra) and Kuper v Keywest (supra), it seems to me that the views expressed by the Justices in that case may be of application to the facts of this case. Thus the plaintiffs may be able to obtain specific performance of the contract subject to the application by the first defendant for title to lot 67 being successful. Therefore, I remain of the view that the plaintiffs' case may have substance.

38 As to the question as to whether the caveat misdescribes the nature of the estate or interest claimed by the plaintiffs, having now received the submissions of the parties, I am of the view that the facts of this case can be distinguished from the facts of Hamden v Widodo (supra). First, the plaintiffs say that a statutory declaration was lodged with the caveats with respect to all three lots. That statutory declaration refers to the making of the contract and annexes a copy of the contract for sale of the land. There was no such explanatory statutory declaration filed in Hamden v Widodo (supra). Ambiguity or a defect in a caveat may be remedied by an accompanying statutory declaration: Cruz & Anor v Osborne & Ors [1999] WASC 8. Secondly, it is clear from the first defendant's further submissions that she does not object to the caveat being extended on the ground of the description of the estate or interest and has not been misled by any misdescription of the estate or interest. As pointed out by the plaintiffs in their supplementary submissions, one of the purposes of ensuring that the caveat explicitly refers to the estate or interest claimed is to ensure that other parties, in particular, the registered proprietor of the land, understands the nature of the estate or interest claimed by the caveator.

39 In these circumstances I am prepared to extend the caveat until further order of this Court.

40 Before concluding, I will deal with one further issue raised by the first defendant in her supplementary submissions. She complains that this application is brought only in respect to lot 66 and lot 689, not lot 67. However, as I stated earlier, an application of this kind has only to be brought where an application under the Act, s 138B is lodged, relevantly, by the proprietor of the land and the Registrar of Titles sends a notice to the caveator advising that the caveat will lapse unless a Supreme Court order is obtained to extend its operation. As the first defendant is not the proprietor of lot 67 she cannot apply to the Registrar of Titles under the Act, s 138B in respect to the caveat on that lot. Further, I can understand why the plaintiffs lodged a separate caveat over lot 67 as there was a different registered owner of that lot. I do not see merit in the first defendant's submission that the plaintiffs have abused the caveat process by the steps that they have taken.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : EGAN & ORS -v- CHRISTINA MARGARET CHUGG as Executor of the Will of ROY MCKENZIE PATON & ANOR [2005] WASC 170 (S)

MATTER : Section 138C of the Transfer of Land Act 1893

CHRISTINA MARGARET CHUGG as Executor of the Will of ROY MCKENZIE PATON

Caveats - Extension of caveat - Whether successful caveators entitled to order for costs

Caveats - Extension of caveat - Whether extension should be ordered upon caveators giving usual undertaking as to damages

Transfer of Land Act 1893 (WA), s 138, s 140

First defendant liable to pay the plaintiffs' costs of the application to extend the caveat

Order for extension of the caveat conditional upon the plaintiffs giving the usual undertaking as to damages

Hunt v McKay, unreported; FCt SCt of WA; Library No 9140; 7 November 1991

J & H Just (Holdings) Pty Ltd v Bank of New South Wales [1971] HCA 57; (1971) 125 CLR 546

Martyn v Glennan [1972] 2 NSWLR 234

Tiverton Estates Ltd v Wearwell Ltd [1975] Ch 146

1 JENKINS J: On 5 August 2005 I delivered my reasons for allowing the plaintiffs' application to extend a caveat. Two issues have arisen for my determination as a consequence of that decision. The first issue is whether or not the order extending the caveat should be conditioned upon the plaintiffs giving the usual undertaking as to damages. The first defendant has submitted that it would be appropriate that such an order be made on the basis of the practice direction that has been issued by the Court in respect to interlocutory injunctions. The practice direction dated 3 October 1975 says that the usual undertaking as to damages given in respect to an interlocutory injunction will usually also be required to be given upon the extension of a caveat.

2 The practice direction was issued prior to s 140 being inserted into the Transfer of Land Act 1893 (WA). Section 140 says that any person lodging a caveat with the Registrar without reasonable cause shall be liable to make to any person who may have sustained damage thereby such compensation as a Judge on a summons in chambers shall deem just and order.

3 The restriction contained in s 140 is that compensation is not payable unless the caveat is lodged without reasonable cause. It does not cover compensation for a caveat that is lodged with reasonable cause but is ultimately found to be unsustainable.

4 The usual undertaking as to damages in interlocutory injunctions is required in exchange for the Court giving the party the indulgence of the injunction. It seems to me to be reasonable in the circumstances of this case to require the plaintiffs to give an undertaking as to damages and I am prepared to so order.

5 Now I turn to the second issue, that of costs of the application to extend the caveat. The plaintiffs have applied for an order that the first defendant pay their costs of the application. The first defendant opposes the application for costs.

6 Pursuant to O 66 r 1 of the Supreme Court Rules, I have a discretion to make an order for costs as I think are fair and just in the circumstances. The general rule is that a successful party to a matter is entitled to a costs order in their favour.

7 Hunt v McKay, unreported; FCt SCt of WA; Library No 9140; 7 November 1991, was an appeal by a proprietor of land who had brought proceedings under of the Transfer of Land Act 1893, s 138 requiring a caveator to show cause why a caveat should not be removed. The proprietor was successful and the Court ordered that the caveat be removed. The proprietor was denied an order for costs but successfully appealed from that decision. In the course of his judgment, Seaman J said at page 7:

"A successful party should only be deprived of his costs if he has done something connected with the institution or the conduct of the suit, or has done some wrongful act in the course of the transaction the subject of the suit: Ritter v Godfrey [1920] 2 KB 47 at 60,61."

8 However, the first defendant submits first, that an application for an extension of a caveat is subject to the same principles as an application for an interlocutory injunction. The general rule in such applications is that costs are reserved to the trial Judge. Secondly, she submits that the plaintiffs should have applied for an interlocutory injunction in the course of their proceedings for specific performance of the contract rather than lodge a caveat.

9 The first defendant says that if they had done that and been successful, costs would have been reserved to the trial Judge and in the circumstances of this case in all likelihood the costs would have been denied to them at trial. In this way the ultimate success of the application for costs in respect to interlocutory relief in the course of the application for specific performance would have depended to a large extent upon whether the plaintiffs were successful in the main action.

10 Another matter that the first defendant has raised is the plaintiffs' conduct in refusing what is said to be a reasonable offer by the first defendant to resolve the issue between the parties and instead lodging the caveat. It is said that this conduct should justify a denial of a costs order in the plaintiffs' favour. I now turn to the resolution of these issues.

11 I do not deny that there is some merit in the first defendant's submissions, but after careful consideration of the parties' oral and written arguments I have decided that the plaintiffs ought to have their costs of this application. The main reasons I have come to this conclusion are first, the application of the general rule that a successful party is, in the usual situation, entitled to a costs order in their favour. Secondly, an application for an extension of a caveat is a distinct matter. The Transfer of Land Act 1893 (WA) envisages that applications of this kind will be brought as a separate application. In my experience, having dealt with a number of such applications and read many more decisions with respect to them, that is the way in which they are brought and prosecuted.

12 Thirdly, the plaintiffs have been successful on the application and it cannot, therefore, be held against them that they chose to proceed by way of caveat proceedings rather than an application for an interlocutory injunction. I appreciate that the first defendant's position is that the issue before the court is not whether the plaintiffs have a caveatable interest on the basis of the contract but whether in fact the plaintiffs have a contract at all.

13 Nonetheless, the plaintiffs' position always has been that they have a valid contract. I have found that there is, on the basis of their arguments, a serious issue to be tried as to whether the plaintiffs have a caveatable interest. As I said, it therefore seems to me that it cannot be held against them that they have proceeded by way of caveat proceedings rather than by way of an application for an interlocutory injunction in the specific performance proceedings.

14 Fourthly, I acknowledge that there was a delay in the institution of the proceedings for specific performance. There should not have been such a delay. In any event the delay has not affected the merits of the application for the caveat.

15 Fifthly, whilst there are many authorities, Tiverton Estates Ltd v Wearwell Ltd [1975] Ch 146 and Martyn v Glennan [1972] 2 NSWLR 234 being but two of them, which state that the principles applicable in caveat proceedings are those applicable in applications for interlocutory injunctions, so far as I am aware none of those cases deal specifically with the issue of costs and say that the principles are the same in respect to costs.

16 Just because it has been said that a caveat is a statutory injunction and that the applicable substantive principles are the same in respect to an application for an extension of a caveat and an application for an interlocutory injunction does not mean that they are the same in all respects. In J & H Just (Holdings) Pty Ltd v Bank of New South Wales [1971] HCA 57; (1971) 125 CLR 546 at 552, Barwick CJ said that the purpose of a caveat is to act as an injunction to the Registrar General to prevent registration of dealings with the land until notice has been given to the caveator so that the caveator can take action against the person lodging a dealing for registration. Two other Justices agreed with his Honour and a fourth, Windeyer J, expressed himself in similar terms.

17 Consequently, a caveat serves a different function to an interlocutory injunction. It is not imposed in order to maintain the status quo between the two parties to an action, although it may have that effect. Consequently, it does not seem to me that the principles as to costs relevant to interlocutory injunctions apply mutatis mutandis to an application for an extension of a caveat.

18 The sixth point I would make is that the first defendant put a positive case to the Court and it was unsuccessful. Even if she is ultimately successful at trial as to the legal issues she has raised the result will not alter the fact that the plaintiffs were successful in this application, on the application of the statutory test for the extension of a caveat.

19 Lastly, in respect to the conduct of the plaintiffs in refusing the offer made by the first defendants, it seems to me that in any event the plaintiffs were entitled to a caveat to protect their interest until settlement occurred. It may well be that their refusal to accede to the offer has extended the date for final settlement, but I am now told that the first defendant has not made or has withdrawn the application for possessory title for the lot that is not in the first defendant's name. Consequently, it is at the very least unclear to me that the offer made on 28 September 2004 would have resolved the issues between the parties in any event. The plaintiffs' refusal to accept that offer does not warrant them being denied their costs in respect to this application.