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1. These proceedings arise out of a contract to purchase a unit in an off-the-plan development known as “Debut” located in Wright. The plaintiffs and the defendant entered into a contract for the purchase of the unit on or about 15 June 2021. At the time of the contract, the defendant’s name was 3 Property Group 16 Pty Ltd, but the name was subsequently changed to Elly Property Wright Residential Pty Ltd.

2. In August 2022, the plaintiffs received a letter from the defendant’s solicitors which gave notice of its intention to rescind the contract. In about October 2022, legal representatives for the plaintiffs and the defendant entered into negotiations about the intended rescission. There was a dispute about whether a concluded agreement had been reached which would allow recission to occur. The matter came before Curtin AJ to determine the dispute as to whether there was an agreement between the parties that the contract be rescinded. On 6 June 2023, his Honour determined that there had been no effective settlement: Elly Property Wright Residential Pty Ltd v Elliott [2023] ACTSC 138.

3. Since that date, the development of the property appears to have progressed, but there has been only limited engagement by the defendant with the plaintiffs.

4. On 3 May 2024, the plaintiffs lodged a caveat over the land. The caveat was registered on 8 May 2024, bearing the caveat number 3311785.

5. On 20 May 2024, the plaintiffs’ solicitor received a Notice to Caveator of Application by Registered Proprietor for Lapsing Notice for the caveat as well as a Notice to Caveator for Lodgment of Instrument for Registration.

6. The proceedings were before Baker J on 31 May 2024. On that date, her Honour made orders temporarily extending the caveat until the matter could be brought back before the court. Following the hearing on 19 June 2024, the caveat was extended until judgment could be delivered.

Orders sought

7. The plaintiffs seek the following orders: 1. An Order for Caveat Number 3311785 lodged by Christopher Ross Elliott and Thuy Quynh Trang Vu in respect of the Land, being Block 4, Section 64 Division of Wright in Volume 2419 Folio 25 be extended until further order. 2. Alternatively, an Order under section 107C(1) of the Land Titles Act 1925 (ACT) for the Plaintiffs to have leave for the lodgement of a further caveat in the same form as Caveat Number 3311785. 3. Any other orders that the Court considers appropriate.

8. The Originating Application also sought an order for preliminary discovery. However, at the hearing on 19 June 2024, counsel for the plaintiffs did not press for that order.

Evidence

Chronology

9. The evidence disclosed the following chronology. (a) 15 June 2021: The contract for the sale of the unit was entered into. (b) 1 August 2022: The defendant issued a notice of its intention to rescind the contract pursuant to s 19C of the Civil Law (Sale of Residential Property) Act 2003 (ACT). (c) October-November 2022: Negotiations occurred between the parties concerning the potential for rescission. (d) 9 February 2023: The defendant commenced proceedings in the Supreme Court seeking to enforce an alleged agreement as to rescission. (e) 6 June 2023: Curtin AJ held that there was no binding and enforceable agreement between the plaintiffs and the defendant to rescind the contract. (f) October 2023: The defendant’s real estate agent confirmed to the first plaintiff that there were four bedroom townhouses (similar to that contracted for by the plaintiffs) available for sale and that the trust account of Lexmerca Lawyers was to be used for the purposes of the deposit. (g) 18 October 2023: The solicitors who had previously acted for the purposes of the sale of the unit, Lexmerca Lawyers, indicated that they no longer acted for the defendant in relation to that contract. No response was received to a subsequent enquiry made of the defendant as to who was responsible for the conveyancing. (h) 4 November 2023 to 22 January 2024: The plaintiffs attempted to contact the defendant’s directors directly, but no response was received. (i) 18 April 2024: The plaintiffs’ solicitors wrote to Lexmerca Lawyers, but were told that “we do not act in relation to this matter” with no further explanation. The plaintiffs’ solicitors then wrote to the defendant seeking an undertaking that the defendant intended to be bound by the contract. (j) 3 May 2024: The plaintiffs lodged a caveat over the land. (k) 20 May 2024: The solicitors for the plaintiffs received two lapsing notices, one under s 107(2)(a) of the Land Titles Act 1925 (ACT) (general lapsing provision) and the second under s 106(1) of the Act (to permit the registration of a document). (l) 21 May 2024: The plaintiffs’ solicitors wrote to the defendant requesting undertakings as to an intention to be bound by the judgment of Curtin AJ and as to compliance with the contract. (m) 24 May 2024: No response having been received from the defendant, the plaintiffs filed the application to maintain the caveat. (n) 29 May 2024: One of the directors of the defendant (Pamela Farrelly) wrote to the solicitors for the plaintiffs declining to give further undertakings, pointing to the contractual provision that the plaintiffs must not lodge a caveat over the land and saying that there is no good reason for maintenance of the caveat.

Other evidence

10. The defendant relied upon the affidavit of Emily Kelly dated 7 June 2024. Ms Kelly is one of the directors of the defendant, having been appointed on 9 October 2023. That affidavit made four significant points: (a) She was aware of the contract and the decision of Curtin AJ. She recognised that any rescission of the contract was governed by s 19B of the Civil Law (Sale of Residential Property) Act. She understood that the company was required to comply with the terms of the contract and that rescission required agreement or a court order. She said that she would not allow the company to act unilaterally to disregard the contract. (b) She described progress of the development, which involved 32 units and 66 townhouses. The roofs and façades were completed, and the internal fit offs were partially complete. She recorded that she had seen the request from the plaintiffs that no carpet be installed in unit 1. She said that carpet had not been laid. (c) She said that she understood that an application for unit titling would not be able to proceed unless the caveat were removed. That would affect the sale of all unit titled units and townhouses. (d) She identified that Centuria Bass was the financier which had sought to register four specific mortgages and it was this that had given rise to the lapsing notice to permit that to occur. She said that in the seven days available to provide evidence, she had not been able to get a response from Centuria Bass with more details of the mortgages. She said, “I have no concern that [Centuria Bass] are not acting appropriately in trying to place mortgages on the land”.

11. A further exhibit was tendered relating to the request for details of the mortgages referred to in Ms Kelly’s affidavit. Exhibit 2 in the proceedings is an email chain which shows that, on 6 June 2024, Elly Property Group requested copies of the mortgages in question, using an email address associated with Jaime Farrelly. The numbers of the mortgages of which copies were requested correspond to those which are shown as having been lodged for registration with the Registrar-General. There are follow-up emails sent from Mr Farrelly’s email address on 14 June and 16 June.

12. There was no explanation as to why the defendant did not have copies of the mortgages, given that they must have been executed by the defendant in order for them to have been lodged for registration on the title. There was no explanation as to why the defendant’s copies were not available or provided to the plaintiff.

13. Counsel for the defendant (who appeared on a direct brief from the defendant pursuant to r 115.1 of the Legal Profession (Barristers) Rules 2021 (ACT)) submitted that an inference was available that the reason that the mortgages were not provided was because, having regard to the history of litigation involving the plaintiffs’ solicitors and the defendant, the defendant did not wish to give the plaintiffs access to the terms of the mortgages. Drawing such an inference would indicate that the explanation given in the affidavit of Ms Kelly was one which was misleading as it implied that the reason for non-provision was unavailability rather than unwillingness.

14. The other point arising from the correspondence which became Exhibit 2 is that the email requests made to Centuria Bass for copies of the mortgages were made from the email address of Jaime Farrelly. Exhibit 3 indicates that Jaime Farrelly is a person who is disqualified from managing corporations for two years until 23 October 2025. Mr Farrelly was a director of the defendant up until 24 October 2023, the date on which the disqualification took effect. On 9 October 2023, an 18-year-old called Saphyre Ann Farrelly was appointed as a director of the company and remained so until 8 January 2024. On 8 January 2024, Pamela Farrelly, Jaime Farrelly’s 77-year-old mother, was appointed as a director.

15. The other director of the company prior to October 2023 was Gary James Kelly. Mr Kelly was also disqualified by the Australian Securities & Investments Commission from the management of corporations for two years ending on 23 October 2025. He ceased to be a director on 24 October 2023. His wife, Emily Kelly, was appointed as a director on 9 October 2023.

Consideration

16. The entitlement to lodge a caveat exists for “a person claiming an interest in the land”: Land Titles Act, s 104(1)(b). In the present case, the registered proprietor has applied to the Registrar-General to have the caveat removed under s 107. Further, the lodgement for registration of the mortgages has triggered the process for lapsing under s 106 to allow those mortgages to be registered.

17. Notwithstanding that the remedy is a statutory one rather than one arising from the equitable jurisdiction of the court, the position of a caveator is analogous to the position of an applicant for an interlocutory injunction: Re Jorss’ Caveat [1982] Qd R 458 at 464-465, quoting Eng Mee Yong v Letchumanan [1980] AC 331 at 335-337. The caveator must demonstrate that there is a serious question to be tried as to the existence of the interest in land and also that the balance of convenience favours the maintenance of the caveat.

18. So far as the serious question is concerned, that involves the establishment of a prima facie case. The establishment of a prima facie case does not mean that the plaintiffs must show that it is more probable than not that the interest exists. It is sufficient that the plaintiffs show a sufficient likelihood of success to justify maintaining the status quo pending trial: Australian Broadcasting Corporation v O’Neill [2006] HCA 46; 227 CLR 57 at [19], [65]-[71]. The application of the prima facie case test in relation to caveats is usefully summarised in Piroshenko v Grojsman & Ors [2010] VSC 240; 27 VR 489 at [12]-[18].

19. In the present case, although some reference was made to potential future proceedings contemplated by the plaintiffs for specific performance of the contract, it is not the prospects of success in those proceedings that must be assessed for determining whether or not there is a serious question to be tried. That is because the serious question is as to whether or not a claimant has, at the time of the lodgement of the caveat, an interest in the land. In the present case, the existence of such an interest was established. The plaintiffs claimed an interest in the land arising from the interest under the contract for the purchase of a unit in the land after registration of a units plan. The interest exists notwithstanding that the registration of the units plan has not yet occurred: Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419; Jessica Holdings Pty Ltd v Anglican Property Trust Diocese of Sydney (1992) 27 NSWLR 140. The existence of such a caveatable interest was recognised in this court in Burnett v 3 Property Group 10 Pty Ltd (No 2) [2023] ACTSC 215 at [5].

20. I do not accept the submission made on behalf of the defendant that, in order for there to be a serious question to be tried, “there should be some threat upon the right to complete the Contract”. The proposition established by Kuper was that a contingent equitable interest such as that held by the plaintiffs was sufficient to justify a caveat lodged prior to the subdivision of the property: Kuper at 432. It was not dependent upon there being a breach or risk of breach of contract. It only required that the interest be one that was capable of being the subject of an order for specific performance. The benefit of the caveat procedure is that, so long as a caveat exists, it protects the interest of a claimant without the need to establish a threat to that interest. It is prophylactic rather than remedial.

21. That means that the substantial contest is over where the balance of convenience lies. The position of the defendant was that there was no reason why the caveat should be maintained in circumstances where a director of the defendant has deposed to the proposition that the defendant will not disregard the contract and where the maintenance of the caveat will prevent the whole of the development from proceeding. The defendant also relied upon the “no caveat” provision in the contract for sale: clause 28.1.

22. On the other hand, the plaintiffs pointed to the conduct of the defendant as indicating an unwillingness to comply with the contract. The plaintiffs have also indicated a willingness to give the usual undertaking as to damages. They have indicated a willingness to consent to the registration of the mortgages so long as they have had an opportunity to examine the terms of those mortgages in order to ensure that they will not be prejudiced by the lodgement and to consent to the registration of the units plan and the confining of their caveat to the single relevant unit.

23. So far as the no caveat provision is concerned, although lodgement of the caveat may involve a breach of contract to which regard may be had if the caveator seeks to maintain or extend a caveat, a person claiming an interest in property is not deprived of their statutory right by the contractual provision: Lintel Pines Pty Ltd v Nixon [1991] 1 VR 287 at 290-291; Australian Property & Management Pty Ltd v Devefi Pty Ltd (1997) 7 BPR 15,255 at 15,257. The existence of the no caveat clause may, however, be taken into account when deciding whether to maintain the caveat in existence: Devefi at 15,257; Badge Constructions (SA) Pty Ltd v Rule Chambers Pty Ltd [2007] SASC 417; 99 SASR 502; Betlehem v Keytown Constructions Pty Ltd (formerly known as Jadestar Investments Pty Ltd) & Anor [2007] WASC 38 at [19]-[20]; Cardinal Constructions Pty Ltd v Ghersinich [2009] WASC 239 at [57], [59]. As Heenan J pointed out in Betlehem at [20], that may be a more significant factor where the maintenance of the caveat would impede the progress of the development.

24. In my view, there are an aggregation of factors which favour the maintenance of the caveat at this stage. In summary, the maintenance of the caveat should not impede the progress of the development and there are a series of circumstances which indicate that it is not unreasonable for the plaintiffs to ensure that their interest in the land is protected by an instrument registered on title.

25. These matters will be briefly elaborated upon: (a) The plaintiffs have recognised the need for the development to proceed and have indicated a willingness to permit the registration of mortgages to enable the refinance of the development to proceed, subject to viewing the terms of those mortgages. They have also indicated the appropriateness of permitting, at the appropriate time, registration of the units plan and the confinement of the caveat to their interest in the individual unit which they have contracted to purchase, once created. Thus, so long as the defendant pragmatically cooperates, the maintenance of the caveats will not impede these two fundamental aspects of the development. (b) The defendant indicated its previous intention to rescind the contract. While there is evidence that the defendant intends to comply with the decision of Curtin AJ, that does not preclude other steps which may affect the plaintiffs’ interests. The course of dealings indicates a desire on the part of the defendant to be freed of the burdens of the contract. (c) The manner in which the defendant has dealt with the plaintiffs and their solicitors is unusual. The evidence does not provide an explanation as to why the defendant’s solicitors were instructed to cease to act in relation to the plaintiffs’ contract in circumstances where there is evidence that they continue to act in relation to other contracts. Although counsel for the defendant provided a plausible explanation that ceasing to act may relate to the defendant’s desire to avoid incurring costs in relation to mechanical issues such as colour and fitting selection, that is not supported by any evidence and is inconsistent with the abrupt and obscure manner in which the former solicitors addressed the issue. Following the solicitors indicating that they no longer acted, the defendant was generally unresponsive to the communications from the plaintiffs or their solicitors. (d) There is evidence of ongoing involvement by Mr Farrelly with the operations of the company. Both Mr Farrelly and Mr Kelly are persons who are disqualified from managing corporations. The reasons for their disqualification are summarised in Exhibit 3. The prohibition on management of corporations extends to participating in making decisions that affect the whole or a substantial part of the business of the corporation and communicating instructions or wishes to the directors of the corporation intending that the directors will act in accordance with those instructions or wishes, or knowing that they are accustomed to act in accordance with those instructions or wishes: Corporations Act 2001 (Cth), s 206A. Counsel for the defendant told the court that the current directors are Mr Farrelly’s mother and Mr Kelly’s wife. The ages, relationships and circumstances in which the current directors took office and the nature of the development with which the company is involved are consistent with there being a risk of the disqualified directors being involved in the management of the company. (e) The evidence as to the conduct of the defendant in relation to the provision of copies of the mortgage documents to the solicitors for the plaintiffs was, at best, incomplete. It tended to suggest that provision of copies of the documents was dependent upon the financier. However, that occurred in circumstances where the documentation had already been signed by the defendant and the instruments lodged for registration. There was no explanation as to why the defendant was unable to provide copies of the documentation that it had executed when requested by the plaintiff. The inference identified by counsel for the defendant, that the non-provision of the documentation was because the defendant did not want to provide it to the plaintiffs’ solicitors, was a plausible explanation, but one which would suggest that the evidence put before the court was misleading.

26. In my view, the combination of circumstances is such as to warrant the maintenance of the caveat. It appears that the only impediment to the two steps identified as being required to allow the development to progress is the unwillingness of the defendant to cooperate by disclosing the terms of the mortgages proposed to be registered. The aggregation of circumstances set out above indicates that the plaintiffs have a legitimate basis for concern that their interests may be prejudiced either by the registration of the mortgages or as a result of the complete removal of the caveat.

27. If, in the future, there is some real difficulty arising in relation to obtaining consent from the plaintiffs to the refinancing of the project, then an order of the court may be obtained. Orders

28. For those reasons, the orders of the Court are: 1. Upon the plaintiffs having given the usual undertaking as to damages, caveat number 3311785 lodged by Christopher Ross Elliott and Thuy Quynh Trang Vu in respect of Block 4, Section 64, Division of Wright in Volume 2419 Folio 25 is extended until further order of the Court. 2. Liberty to apply is granted on two days’ written notice. 3. The costs of the proceedings are reserved.

I certify that the preceding twenty-eight [28] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop. Associate: Date:

************** Amendments 7 August 2025 Amend the Case Title from “Elliot v Elly Property Wright Cover page Residential Pty Ltd” to “Elliott v Elly Property Wright Residential Pty Ltd”. Amend the citation for [2023] ACTSC 138 in the Cases Cited Cover page from “Elly Property Wright Residential Pty Ltd v Elliot [2023] ACTSC 138” to “Elly Property Wright Residential Pty Ltd v Elliott [2023] ACTSC 138”. Amend the name of the First Plaintiff in the Parties from Cover page “Christopher Ross Elliot” to “Christopher Ross Elliott”. Replace “Elliot” with “Elliott”. Paragraphs [2], [7]