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Facts

3. On 20 June 2023, Mr Douglas executed a document described as a Supply Chain Finance Facility between himself and FIFO. There was no dispute that Mr Douglas executed the document as the “Customer”, “Guarantor” and, importantly for present purposes, “Grantor” as defined in the Facility. However, as I will explain further below, Mr Douglas contends that he executed the Facility in what he described as "deceptive circumstances" as a result of the alleged actions of a representative of FIFO, Mr Mathias Kopp.

4. The Facility includes:

“7 SECURITY

7.1 As security for payment of the Money Owed and all of the Customer’s and the Guarantor’s obligations to Fifo at any time (including the obligation to pay the Purchased Debt as confirmed in accordance with clause 2.3(b)) each Grantor unconditionally gives Fifo a Security Interest in the Collateral. Accordingly, Fifo has a Security Interest in all of the Grantor’s present and after-acquired property. …

12 DEFINITIONS AND INTERPRETATION

12.1 The following definitions will apply: …

‘Collateral' means all of a Grantor’s present and after-acquired property assets and undertaking wherever it is situated; all rights and interests conferred by the PPSA; and all property over which a Grantor can give a Security Interest. It includes all estates and interests in land (whether freehold, leasehold or chattel) interests in fixtures and interests in crops. …

‘Grantor’ means all and any one or more of the persons who are named in item 3 of the schedule. …

‘Money Owed’ means all money of whatever nature owed (whether actually, contingently or prospectively) or payable by the Customer to Fifo at any time. …

‘Security Interest’ means any:

(a) security interest (as defined in the PPSA);

(b) security for payment of money, performance of obligations or protection against default (including a mortgage, bill of sale, charge, lien, pledge, trust, power, right of set-off, assignment of income and garnishee order); and

(c) right, preferential interest or arrangement of any kind (including any entitlement under a trust) giving a person priority or preference over clams of other persons with respect to any property, asset or right.

It includes an agreement to create any of them or allow any of them to exist. …”

5. There was no dispute that FIFO advanced money from time to time to Mr Douglas under the Facility. Some of it was repaid. However, on any view, there remains a debt of at least $300,000 owing by Mr Douglas to FIFO. I record that Mr Douglas told me, as I understood him, that he disputes even that liability until he is given certain information by FIFO. However, I was not taken to any provision of the Facility entitling him to that information or making his liability conditional upon him being given that information. At least as I presently understand his contention, the information he seeks appears to me to be irrelevant to the question of his liability, although it may be of commercial interest to Mr Douglas.

6. On 11 December 2023, some six months after entering into the Facility, Mr Douglas purchased the property for $2,980,000 with the assistance of a loan from Westpac Banking Corporation which is secured by a registered first mortgage. Mr Douglas is in default under the loan, owing Westpac approximately $2,800,000. There is a second lender to which some $35,000 is apparently owed and secured by a second mortgage.

7. On the evidence before the Court, Westpac and the second lender are currently owed between them $2,839,502 by Mr Douglas. That figure assumes some importance because it is suggested for FIFO that if the property has maintained at least the value of its purchase price, there is still approximately $140,000 in equity that may be available to FIFO, which accepts that it stands in priority behind the two secured lenders.

8. The current state of the register in relation to the property discloses mortgages to Westpac and the second lender, a caveat by the second lender, the caveat, and a caveat by a Ms Pun. Ms Pun has indicated that she will withdraw her caveat unconditionally.

9. Mr Douglas told me from the Bar table that the position of Westpac, unsurprisingly, is that it is “very concerned” about his current arrears and expects "something to be done". While there is no evidence before the Court as to Westpac’s intentions, the Court's own experience is that if “something is not done” reasonably soon it would not be unusual for Westpac to enforce its security. However, that is not a possibility that I take into account on the present application.

A caveatable interest in the property?

10. The integers which the Court must consider to determine the present application are well understood. The first question is whether FIFO has a caveatable interest, being a claim to a legal or equitable estate or interest in the property. In my respectful opinion, it clearly does because the property is after-acquired property within the meaning of “Collateral” under the Facility (see [4] above). That is to say, the Court is satisfied that FIFO’s claim “has substance” for the purposes of s 74K of the Real Property Act 1900 (NSW).

11. Mr Douglas put a number of submissions to the Court contending that there was no caveatable interest. However, and with respect to him, the cases to which he drew attention were those which focussed on the law where an agreement did not otherwise give a lender an express security interest, but contained a provision to the effect that the lender could lodge a caveat to protect its interest under the agreement. Cases about whether such a provision gives rise to a caveatable interest are not relevant to the present case because it is clear from the terms of the Facility that a security interest in Mr Douglas’ real property was expressly conferred which extended to property he acquired after the date of the Facility such as the property.

12. The next question is whether the Court should exercise its discretion under s 74K of the Act to extend the caveat. By analogy with injunctions, this requires attention to whether there is a serious question to be tried and the balance of convenience.

Serious question to be tried

13. Is there a serious question to be tried as to whether FIFO is entitled to the final relief which it seeks? At the moment that relief is confined to various declarations as to its interest in the property and damages. I was informed by Mr Robertson that it was intended that the relief would ultimately be amended to include an application for judicial sale of the property (I interpose, if no secured lender has in the meantime taken action). Given that the Court is satisfied that the Facility confers a security interest on FIFO in the property, there is a serious question to be tried as to FIFO's rights in the property.

14. The real issue on this question is whether Mr Douglas has a defence which would have the effect that FIFO’s rights in the property would be rendered unenforceable by the intervention of equity or a statutory remedy relating to misleading and deceptive conduct. Mr Douglas contends that at the time he entered into the Facility he was told by Mr Kopp that the Facility would be unsecured. Mr Kopp denies any such statement. There is a contest between the two men as to what was said.

15. Mr Douglas’ defence arises from a disputed conversation. At this interlocutory stage, even when that is compared to the undoubted strength of the case which FIFO brings under the Facility, it nevertheless confirms the Court’s conclusion that there is a serious question to be tried as to FIFO's entitlement to the relief which it seeks and which it has foreshadowed that it will seek.

Balance of convenience

16. Turning to the question of the balance of convenience, this clearly favoured the extension of the caveat where the caveatable interest had been established together with a serious question to be tried, subject only to the contrary argument which turned on two connected propositions advanced by Mr Douglas. The first was that there could be no prejudice to FIFO if the caveat was not extended. This was because FIFO's position would be no worse upon a refinancing because there was no equity in any event for FIFO in the property. The second limb of Mr Douglas' balance of convenience argument was that he was attempting to refinance the property and the mere presence of the caveat was preventing any steps being able to be taken that were likely to bear fruit in that regard. I will consider each of these propositions in turn.

17. As to whether or not there is equity in the property, the evidence before the Court on this interlocutory application does not enable the Court to come to a sufficiently secure conclusion one way or the other. This is because, to put matters colloquially, such evidence as the Court has leaves it rather too close to call.

18. If it be the case (as Mr Robertson submitted) that the best evidence of the current value of the property is what it was purchased for in December 2023, then there is approximately $140,000 equity after the current secured debtors are paid out. However, the Court takes judicial notice that may be an uncertain starting point (in either direction) given the variations in property prices since December 2023.

19. On the other hand, Mr Douglas has pointed to two valuations which he has obtained. One of these is a valuation as at 2 December 2025 apparently for mortgage purposes that values the property at $2,800,000. However, I accept Mr Robertson's submission that the Court should be cautious in placing much weight on this valuation when the valuation is itself qualified by an opening comment that "the sales utilised within the report do not fit the standard sales evidence tolerances, due to market characteristics. Some of the sales utilised may be over six months old, not within immediate locality or may fall outside of the preferred 15% value range".

20. The other valuation relied upon by Mr Douglas is an automated valuation assessment, presumably obtained online, from Macquarie Bank, that estimates the current value of the property (again on a mortgage lending basis because it refers to supporting a "Macquarie Bank Residential Home Loan Application") of $1,962,000. Again, I accept Mr Robertson's submission that for present purposes an automated valuation of that kind is not one on which the Court should place much weight.

21. Given the state of the valuation evidence to which I have referred and its difficulties, I am not satisfied that Mr Douglas has met the burden, even on an interlocutory application of this kind, of satisfying the Court that there is no equity in the property that might be available to FIFO upon any sale of the property.

22. Turning to the second of Mr Douglas's submissions, the evidence in support of his submission that the caveat is preventing even any attempt to refinance the property was very thin. It consisted of an email to Mr Douglas, which he informed the Court was from his finance broker, dated 9 August 2026 at 10.50am (being yesterday, and clearly obtained for the purposes of these proceedings, but nevertheless not objected to, with respect correctly, by Mr Robertson on this interlocutory application). That email stated (sic):

“With regards to the refinancing of the South Windsor Property, once the caveats of FIFO and Amita Purja Pun are removed without any agreement and any Court order for both of the Caveats to come back on the property, we will be able to obtain Lending terms from 2 and more Private Lenders, one of the Lenders can be an equity partner to provide some funds to renovate to add value to the property as a Second Mortgagee, and the other lender will be as a First mortgagee to pay St George Bank and Parsons First and Second Mortgages that are currently on the property”.

23. I note that the email does not in terms go as far as Mr Douglas has submitted. I do not read it as suggesting that the broker would not now be able to treat with potential financiers even on a conditional basis concerning the removal of any caveats.

24. Furthermore, and of more importance for present purposes, is that there is no evidence of what attempts Mr Douglas has made to obtain finance, no evidence from a financier supporting the submission that he has made, and no evidence of his prospects of otherwise obtaining finance or that he would be able to service the terms of any finance that might be provided.

25. The evidence in support of the proposition which he advances is not of sufficient weight to enable the Court to reach that conclusion. It is, for whatever it may be worth, also contrary to the Court's own experience in dealing with many applications of this kind where the Court is well aware that commercial negotiations are conducted with private financiers during the course of dealing with the question of whether or not and on what terms caveats might be removed.

26. For these reasons, the Court is not satisfied that either of the arguments which Mr Douglas has advanced on the balance of convenience are made out. Furthermore, and also against him on the question of balance of convenience, is the undertaking which Mr Robertson has proffered on the instructions of his client to the Court:

“In the event that that the defendant obtains an unconditional offer of refinancing in respect of the two existing debts secured by mortgage over the property at XXXXXX Street, South Windsor NSW (Property) (those debts being secured by a mortgage to Westpac and a mortgage to BJ&KM Sweeney Super Pty Ltd & Summit Capital Pty Ltd) (Refinance), and the terms of the Refinance would not prejudice the plaintiff’s security interest in the Property and would leave the plaintiff in no worse position than its present position, the plaintiff undertakes to the Court that it will withdraw its Caveat XXXXXX from the title of the Property to allow the Refinance to proceed (including the registration of a mortgage to the new financier), and will then re-lodge a caveat on the title of the Property.”

27. In summary, the Court is satisfied that FIFO has a caveatable interest in the property by reason of the terms of the Facility; that there is a serious question to be tried in relation to FIFO's rights in the property, including taking into account the nature of the defence foreshadowed by Mr Douglas; and, that the balance of convenience favours the extension of the caveat.

Undertaking as to damages

28. There is one other matter to which I should refer. In the course of earlier interlocutory hearings before Slattery J sitting as Duty Judge, his Honour raised some concerns about the value of the undertaking as to damages given by FIFO. His Honour directed that evidence be filed by Mr Kopp in relation to that issue. Mr Kopp has done so. Because he is travelling overseas, he has not been able to provide evidence in relation to FIFO's financial position, but he has been able to provide evidence of the financial position of a company related to FIFO, CK Advisory Group Pty Limited, of which he is a director.

29. That evidence satisfies the Court for present purposes that at least CK is in a position to offer an undertaking as to damages of substance. Mr Kopp now proffers the undertaking through Mr Robertson on behalf of both FIFO and CK. The Court is satisfied that supported now by that additional undertaking, it is appropriate to extend the caveat until further order.

30. Having regard to the defence foreshadowed by Mr Douglas, the matter should proceed by way of pleadings in the Real Property List. The Court will make directions to that effect.

Costs

31. FIFO applies for its costs of the present application. Mr Douglas submits that they should be reserved. Mr Douglas, as was his right, vigorously contested the application for the extension of the caveat, but has failed. He has not advanced any persuasive reason why costs should not follow the event, and that is the order which the Court will make.

32. He has also suggested that the proceedings should be expedited. That will be a matter for him to make an application in the usual way for the transfer of the proceedings to the Expedition List. In the meantime, I will make directions to allow the matter to progress in the Real Property List.

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