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

BETWEEN : MIDLAND BRICK COMPANY PTY LTD (ACN 008 674 244)

Caveats - Application to extend operation of caveat - Finding that interest sought to be protected was a restrictive covenant - Whether interest described with sufficient particularity - Whether caveator entitled to lodge an absolute caveat - Whether injunction to restrain dealing should be granted

Property Law Act 1969, s 48(1), s 48(3), s 49

Transfer of Land Act 1893, s 137, s 138B, s 138C(2), s 138C, s 138D(1)

Bahr v Nicolay (No 2) [1988] HCA 16; (1988) 164 CLR 604

Depsun Pty Ltd v Tahore Holdings Pty Ltd [1990] ANZ ConvR 334

Forestview Nominees Pty Ltd v Perpetual Trustees WA Ltd [1998] HCA 15; (1998) 193 CLR 154

London County Council v Allen [1914] 3 KB 642

Maynard v Goode [1926] HCA 4; (1926) 37 CLR 529

Mitchell, In re; Adam (1895) 16 LR (NSW) 123

Paul, In re (1902) 19 WN (NSW) 114

Quadramain Pty Ltd v Sevastapol Investments Pty Ltd [1976] HCA 10; (1976) 133 CLR 390

Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596

Tooth & Co Ltd v Barker [1960] NSWR 51

Victorian Farmers' Loan & Agency Co Ltd, In re [1897] VicLawRp 117; (1897) 22 VLR 629

1 HASLUCK J: By an originating summons dated 11 September 2002 the plaintiff seeks an order that a caveat number H450939 lodged against the land referred to as portion of Swan Location L and being part of the land on Diagram 6551 and being the whole of the land comprised in Certificate of Title Volume 2062 Folio 631 be extended until further order of the Court.

2 Various matters are brought into issue by the originating summons including the question of whether the plaintiff has a caveatable interest in the subject land. A question also arises as to whether the plaintiff's caveat is in an appropriate and sufficient form.

Transfer of Land Act

3 Section 137 of the Transfer of Land Act 1893 provides that any person claiming "any estate or interest in land" under any unregistered instrument, document or writing may lodge a caveat with the Registrar in an approved form forbidding the registration of any person as transferee or proprietor of and of any instrument affecting such estate or interest either absolutely or until after notice of the intended registration or dealing be given to the caveator or unless such instrument be expressed to be subject to the caveator's claim.

4 The Transfer of Land Act was amended in 1996 to introduce new provisions concerning the circumstances in which certain caveats would lapse and authorising the Court to extend the operation of those caveats.

5 Section 138B allows for a notice to be served upon the caveator to the effect that unless the caveator obtains an order from the Supreme Court extending the operation of the caveat within 21 days or such period as is specified in the Court order the caveat will lapse.

6 Section 138C(2) provides that on the hearing of an application for an order extending the operation of the caveat the Supreme Court may make an order for extension or such other orders as it thinks fit concerning the caveat if it is satisfied that the caveator's claim has or may have substance.

7 The application made by the plaintiff in the present case is made pursuant to s 138C of the Transfer of Land Act.

8 The circumstances giving rise to the application in the present case are described in affidavits filed and served on behalf of the plaintiff, being the affidavit of Robert Graeme Harvey sworn 11 September 2002 and the affidavit of Andrew Ross MacPherson sworn 7 October 2002. I have before me also on the opposing side an affidavit sworn by the first defendant on 20 September 2002.

9 It seems that the plaintiff company operates and manages brick making facilities on land adjacent to the subject land. On or about 11 April 2000 the plaintiff agreed to sell the subject land pursuant to a contract which is constituted principally by a form of offer and acceptance signed by the first defendant as purchaser and various letters passing between the parties.

10 The letters in question referred to certain special terms that were subsequently reflected in a deed dated 10 May 2000 which was executed by the parties shortly before settlement.

11 I am of the view that in circumstances where the parties have committed their agreement to writing the deed must be treated as the operative document in determining the final form of the agreement between the parties as to the matter in question. I will therefore not traverse the entirety of the exchanges between the parties prior to settlement. Suffice it to say that the land was sold to Ms Welsh for the sum of $915,000 and upon the basis that the land was not to be used in a certain manner.

12 The deed dated 10 May 2000 contains a recital to the effect that the plaintiff had agreed to sell the subject land known as "Mandalay" on certain terms and conditions contained in an offer and acceptance dated 11 April 2000 including, inter alia, the right for the vendor to lodge a caveat against the property "for the purposes hereinafter referred to".

"2.1 The Purchaser irrevocably acknowledges and agrees that:

2.1.1 the Property will not be sub-divided at anytime without the written consent of the Vendor first had and obtained;

2.1.2 the Purchaser acknowledges that the Vendor operates and manages brick making facilities adjacent to the Property and that brick making is deemed to be a noxious industry. On this basis the Purchaser understands and agrees that she will not complain about emissions from the Plant to any statutory authority;

2.1.3 the Purchaser further acknowledges and agrees that the Vendor may lodge a caveat over the Property as chargee to protect its rights contained in this clause including, without limitation, its rights to prevent the Purchaser sub-dividing the Property without the written consent of the Vendor first had and obtained."

14 I pause to note that in cl 2.1.2 reference is made to the plaintiff company as Vendor operating and managing brick making facilities adjacent to the subject land and that brick making is deemed to be a noxious industry. There was no other evidence before me concerning such matters but they did not seem to be seriously disputed. I note from the Concise Oxford Dictionary that the term "adjacent" means lying near or contiguous. The term "contiguous" means touching, adjoining, next in order or neighbouring. Argument before me proceeded on the assumption that it would probably be established by evidence bearing upon such matters that the plaintiff company retained land adjoining the land sold to Ms Welsh.

15 The deed does not specifically purport to be made on behalf of the heirs, successors or assigns of the respective parties. However, I remind myself that by s 48(1) of the Property Law Act 1969, unless a contrary intention is expressed, a covenant relating to any land of a covenantor or capable of being bound by him, shall be deemed to be made by the covenantor on behalf of himself, his successors in title and the persons deriving title under him or them, and, has effect as if those successors and other persons were expressed.

16 Section 48(3) provides that in connection with covenants restrictive of the user of land "successors in title" shall be deemed to include the owners and occupiers for the time being of the land.

17 There was some suggestion in the course of argument before me that the exchanges between the parties prior to execution of the deed evidenced an intention on the part of Ms Welsh to exclude any words that would have the effect of binding her successors in title. It was put to me that the relevant exchanges should be characterised as a "contrary intention" within the meaning of s 48 of the Property Law Act.

18 I am not persuaded to this point of view in the circumstances of the present case. I proceed from the premise that it is not open to me to take account of parol evidence concerning such a matter. Unless the contrary intention is reflected in the deed itself, the effect of s 48 of the Property Law Act will be that the covenant provided for in the deed by Ms Welsh is binding not only upon her but also upon her successors in title and persons deriving title under her.

19 Even if I were at liberty to have regard to the parol evidence, I am of the view that the parol evidence contended for in the present case is equivocal. It does not lead to a firm conclusion that the purchaser was not to be bound in the manner just mentioned. The legal advisors to the vendor may have been willing to leave out the words bearing upon this issue simply because the words in question were thought to be superfluous as a matter of conveyancing style. They may well have thought that the position was adequately covered at law by s 48 of the Property Law Act.

20 Before leaving the Property Law Act I must refer to s 49. It provides that when the benefit of a restriction as to the user of any land is or purports to be annexed by any instrument to other land the benefit shall, unless it is expressly provided to the contrary, be deemed to be and always to have been annexed to the whole and to each part of that other land.

21 On 11 May 2000, being the day following execution of the deed by the parties, the subject land was transferred into the name of Ms Welsh. It is apparent from the Certificate of Title that simultaneously the National Australia Bank Limited registered a first mortgage against the land.

22 A week or so later, on 22 May 2000, the plaintiff company lodged a caveat against the land being the caveat the subject of these proceedings.

23 It was common ground at the hearing before me that the particulars relied upon by the plaintiff were set out upon a caveat document in the approved form. This requires the caveator to state the estate or interest being claimed and the facts or circumstances by virtue of which the caveator claims that estate or interest. Where any claim is alleged to arise out of a document, the relevant document must be lodged with the caveat.

24 In the present case, on that part of the form on which the claimant is required to specify the estate or interest being claimed, the plaintiff by its solicitor and agent simply wrote "as grantee".

25 In the next panel on the form where the caveator is required to specify the grounds on which the claim is made, the plaintiff company by its solicitor and agent typed in the words "a deed agreement dated 10 May 2000".

26 In the next panel on the form at which point the claimant is required to state the nature of the caveat the word "absolutely" appears. In other words, the caveator purports to forbid the registration of any instrument affecting the estate or interest claimed by the caveator "absolutely".

27 These events are drawn together in the affidavit of Mr Harvey in which he says at par 9 that:

"Under the Caveat, the plaintiff claimed an interest in the Property as grantee, pursuant to the Deed, and forbade the registration of any instrument affecting the said interest, absolutely."

28 It seems that 2 years later, in mid-2002, the first defendant needed to arrange some additional finance to be secured against the land. She asked the plaintiff to remove the caveat but the plaintiff refused to do so. There have been exchanges between the parties as to whether the plaintiff is entitled to lodge an absolute caveat but these negotiations have not led to any resolution of the dispute.

29 It was against this background that the first defendant arranged for a notice to be issued to the caveator with the result that the plaintiff company has taken steps to have the operation of the caveat extended in the manner allowed for by s 138C of the Transfer of Land Act.

30 The relevant principles upon which the Court is to act in regard to an application of this kind are as set out in the decision in Jandric v Jandric [1999] WASC 22. Commissioner Buss QC said this in paras 24 - 26:

"24. As I have mentioned previously, the plaintiff must demonstrate on the evidence that his claim to a caveatable interest in the Land raises a serious question to be tried. If there is a serious question to be tried, the question will not, except in the most exceptional circumstances, be determined on originating summons. See Porter v McDonald [1984] WAR 271 at 276; Halse v Embling, unreported; FCt SCt of WA; Library No 970734; 22 December 1997. It is not appropriate to attempt to resolve conflicts of evidence on affidavit. See Eng Mee Yong (supra) at 341; Halse (supra) per Parker J at page 4. As Brinsden J observed in Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129 at 141:

'... the jurisdiction granted by section 138 should not be exercised so as to remove a caveat unless the case is one in which it is patently clear that the estate or interest sought to be protected cannot be made out and that degree of clarity will not emerge if there are disputed questions of fact, when the respondent should be left to proceed by way of action to establish the claimed interest or estate.'

25. Accordingly, if a caveator is able to demonstrate a reasonably arguable case as to the existence of a caveatable interest, the ordinary course is for the caveat to remain and the disputed question to be left for trial by writ of summons with pleadings. However, a caveator's claim must, in fact and law, be more than merely frivolous or vexatious, and it must appear from the evidence on the originating summons that the caveator might ultimately succeed in establishing his caveatable interest. See Halse (supra) per Parker J at page 14.

26. In my opinion, these principles, which have been developed in the context of applications under s 138 of the Act, apply to an application under s 138C."

31 I note that the approach described by Commissioner Buss QC was approved by White AUJ in Hughan v Gray [2002] WASC 164 at par 13.

32 I note also that in Bonini v Western Australian Real Estate Custodian Ltd [2001] WASC 258 Pullin J had this to say at par 11:

"In proceedings under s 138B(2), to extend the operation of a caveat, the court has jurisdiction to decide whether the caveator's claim 'has or may have substance'. In most cases, the practical reasons will still require only a decision about whether the caveator's claim 'may have' substance; in other words, if the caveator has an arguable case. However, there is no longer any legal reason why, in a clear case, the court cannot finally decide that the caveator's claim 'has' substance, ie to finally decide the caveator's claim. And see Australian Security Estates Pty Ltd v Bluecrest Holdings Pty Ltd [1999] NSWSC 524, par 4."

33 It follows from these cases that I must begin by looking at the question of whether the caveator in the present case can be said to have a caveatable interest in the subject land.

34 In earlier discussion I noted that by s 137 of the Transfer of Land Act that a caveat can be lodged where a person claims "any estate or interest" in the subject land. The decided cases recognise that it is only a person who has or claims a legal or equitable interest in land in the nature of an estate or equitable claim who can lodge a caveat. For example, the High Court held in Municipal District of Concord v Coles [1905] HCA 35; (1906) 3 CLR 96 that a municipal council has not such an estate or interest in land dedicated to the public as a road as will entitle it to lodge a caveat.

35 The conventional wisdom in various Australian jurisdictions is that caveats may only be lodged to protect proprietary interests in land: See Bradbrook MacCallum and Moore, "Australian Real Property Law" (2nd ed) at par 4.83. However, in regard to Western Australia it has been argued that the wording of s 137 of the Transfer of Land Act results in a proprietary interest not being necessary to establish a caveatable interest. It has been suggested by one author that the term "interest" is the relevant statutory provision does not per se import a proprietary interest: See Boyle: "Caveatable Interests" (1995) 69 ALJ 237. The learned author submits that an equitable interest of the sort often dismissed as in the nature of a claim in personam, a mere personal right, is a caveatable interest.

36 The same author goes on to say this at 240 of the relevant article:

"A caveat is a statutory injunction: Barry v Heider [1914] HCA 79; [1914] 19 CLR 197 at 221. It confers no proprietary interest. Its purpose and function is to maintain the status quo to preserve and protect the rights of a caveator. It prohibits the caveator's interest from being defeated by the registration of a dealing without the caveator having first had the opportunity to invoke the assistance of a court to give effect to the interest: see Kerabee Park Pty Ltd v Daley (1978) 2 NSWLR 222. The interest may arise through the application of legal rules and principles, or it may arise because a specific equitable remedy exists to protect it. To limit the right to caveat only to interests classified as proprietary in nature is to deny a chief purpose of caveats."

37 The plaintiff in the present case contends that the covenants by Ms Welsh reflected in cl 2 of the subject deed and especially the covenant not to subdivide the subject land, should be characterised as a restrictive covenant, albeit not registered as such. The covenant was intended to run with the land and to bind the first defendant's successors in title and, being enforceable in equity, should be characterised as an estate or interest in the subject land which is vested in the plaintiff.

38 One finds a comprehensive review of the law concerning restrictive covenants in Bradbrook and Neave: "Easements and Restrictive Covenants in Australia" (2nd ed) commencing at page 259. The learned authors note that in the seminal case of Tulk v Moxhay [1848] 41 ER 1143 Lord Cottenham LC held that equity would permit the enforcement of a covenant affecting land against a successor in title to the covenantor, if the successor took with notice of the covenant. The learned authors go on to say this at par 12.8:

"In summary, a restrictive covenant is a promise, restricting land use, given for the benefit of other land, the benefit and burden of which will run in equity provided that certain conditions are satisfied. It is an interest in land. In Australia restrictive covenants have often been used by property developers to maintain the value of land or house and land packages which are being sold. Individuals who sell part of their land, but intend to continue living on the retained section, may also require the purchaser to enter into restrictive covenants, so that the amenity of the retained land is protected. Such covenants have been used to prohibit erection of flats, to impose height limits on buildings, to restrict land use to, for example, residential purposes, to prohibit use of certain building materials, to prevent building on the land without consent and for a variety of other purposes."

39 In subsequent discussion the learned authors go on to describe the conditions that have to be satisfied. The covenant must touch and concern the land benefited. It must have been entered into with the holder of a legal estate in the land which is to be benefited. The benefit of the covenant must be intended to run with the land. The land which is benefited by the covenant must be ascertainable by reference to the terms of the deed read in the light of surrounding circumstances.

40 The learned authors note at par 15.3 that the general principles regulating the interpretation of restrictive covenants do not differ from those regulating the construction of other documents. The object of interpretation is to discover the intention of the parties as revealed by the language of the document in question. The parol evidence rule generally prevents the use of extrinsic material to determine the meaning of words in a document, but this does not prevent the Court reading the document in the light of the factual background against which it was made. Direct evidence as to the actual intention of the parties (for example, evidence of instructions given to the person drafting the document) is inadmissible: See DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423 at 429.

41 The learned authors note elsewhere at par 13.17 that the land which is benefited by the covenant must be ascertainable by reference to the terms of the deed read in the light of surrounding circumstances. Reference is made to Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500 in which Tucker LJ indicated at 508 that extrinsic evidence will be admissible to prove the extent and situation of the lands of the respective landowners.

42 I noted earlier that in the present case the land retained by the plaintiff, which is said to be the land benefited by the covenant, is described in cl 2 of the deed only as a site upon which Midland Brick as vendor operates and manages brick making facilities adjacent to the subject land. It seems to me, however, upon the basis of the authorities just mentioned that in the circumstances of the present case, notwithstanding the generality of the language used in the deed, the plaintiff has reasonable prospects of adducing extrinsic evidence to establish that it is the proprietor of adjacent land to which the covenant given by the first defendant relates.

43 The same authors go on to observe that provision is made by the Transfer of Land Act in Western Australia for restrictive covenants to be registered. The Registrar is authorised to notify the restrictive covenant upon the Certificate of Title of the burdened land. The authors say at par 17.28 that although there is some New Zealand authority to the contrary, dicta in a number of Australian cases supports the view that restrictive covenants are caveatable interests, even under legislation requiring the caveator to have an "estate or interest" in the land.

44 There is also authority to the effect that an unregistered restrictive covenant is an equitable interest in the land which may be protected by caveat: Blacks Ltd v Rix [1962] SASR 161.

45 The plaintiff contends that the specific acknowledgement in cl 2.1.3 of the deed by the first defendant that the plaintiff may lodge a caveat to protect its rights including the right to prevent subdivision of the subject land is a recognition that the plaintiff has a caveatable interest in the subject land with the result that the operation of the absolute caveat lodged by the plaintiff should be extended.

46 The first defendant contends that the covenants by the purchaser reflected in cl 2 of the deed were not intended to run with the affected land. The various undertakings are in the nature of personal covenants only. In the absence of any specific reference in the deed to the covenants being binding upon the first defendant's successors in title, they should be characterised as personal covenants only and cannot be regarded as an estate or interest in the subject land in respect of which the plaintiff is entitled to lodge a caveat.

47 More particularly, it is said that the first defendant's undertaking not to complain about emissions from the plaintiff's brick making plant does not partake of the character of an estate or interest in the subject land. It is questionable whether such a claim could be specifically enforced in equity and there is no "grant" as suggested by the caveat.

48 The first defendant drew upon Woodberry v Gilbert (1907) 3 Tas LR 7 in support of her contention. In that case, by indenture, the plaintiff assigned certain horses, vehicles, and chattels to Gilbert, and covenanted that he would not let certain stables or any other stables which might be built on certain land to be used for livery work. The plaintiff covenanted also that he would not carry on the business as a livery stable keeper in the said stables. Gilbert lodged a caveat forbidding any dealing with the land on which the stables were built without notice to him.

49 It was held that the plaintiff's covenant was purely personal and did not run with the land, and did not confer any interest in the land in question within the meaning of the statutory provision concerning caveats.

50 Clark J was of the opinion that the right to the benefit of a restrictive covenant running with the land, or a right to purchase the land, would be an interest in the land within the meaning of the relevant provision. However, he was of the view that the covenant in question was not a covenant running with the land, and that it was only an amplification of the personal covenant not to carry on the business of a livery stable keeper. Its evident purpose was to preclude the plaintiff from assisting to establish a rival business to that of the putative caveator and receiving any benefit from it in the form of rent. There was not any estate or interest granted by the indenture to the caveator in the land, and the benefit of the covenant therefore did not attach to any such estate or interest in that land.

51 His Honour went on to observe that there was not, to his knowledge, any such thing known to the law as a restrictive covenant running with the land in favour of a person who has not any estate or interest in the same land or in some other land to the occupation and use of which the covenant relates. The covenant in the case before him was in fact a purely personal one, and would not bind any purchaser of the fee simple of the land.

52 It follows from earlier discussion that in responding to an originating summons issued pursuant to s 138C of the Transfer of Land Act seeking an order that the operation of a caveat be extended, I am not required to make a final determination as to the rights of the parties unless it is clear from the materials before me that the caveator's claim to an estate or interest in the subject land cannot succeed.

53 In the present case, in regard to the question of whether the plaintiff has a caveatable interest in the subject land, I am not persuaded that the plaintiff's claim cannot succeed. To my mind, it is not conclusive that the parties have agreed a caveat can be lodged. The crucial question as to this aspect of the dispute is whether the covenants should be characterised simply as personal covenants or whether they should be characterised as restrictive covenants running with the land.

54 I consider that the plaintiff has advanced an arguable case that the covenant against subdivision is intended to restrict the use of the subject land as land adjoining an industrial brickworks. In construing the deed one can discern the underlying purpose. The plaintiff's concern was to ensure that once it ceased to be the proprietor of the subject land, no subsequent owner of the land would ever subdivide it and thereby create an increased density of population which would be likely to complain of noxious activities being conducted on the adjoining land. To my mind, there is an arguable case that this should be regarded as a covenant designed to secure the amenity of the retained land. Such a covenant conforms to the essential requirements of a restrictive covenant.

55 It appears from earlier discussion that an unregistered restrictive covenant arguably gives rise to a caveatable interest in the subject land.

56 I noted also in earlier discussion that the claimant must establish that a covenant designed to secure a benefit for the retained land must be expressed in such a way as to satisfy the Court that there was an intention the covenant would run with the land. To my mind, the effect of s 48 of the Property Law Act is that this will be assumed unless a contrary intention is expressed in the deed or, in a case of ambiguity, where a contrary intention can be divined from the surrounding circumstances. These latter modifications of the general rule established by s 48 do not apply in the circumstances of the present case. It therefore follows that the covenant against subdivision must be regarded as running with the land as a consequence of the rule in s 48 concerning the successors in title. Section 48 creates a statutory presumption that the parties intended the covenant to apply to future proprietors of the subject land.

57 I recognise that the conclusion I have just expressed is less persuasive in regard to the related covenant given by the first defendant not to complain about emissions from the plaintiff's brick making plant to any statutory authority. It might be said of such a covenant that it is directed more to the operation of a particular business than to securing the amenity of the land itself. However, on balance, I consider that the plaintiff's case is arguable as to this covenant. In any event, for present purposes, it seems to me that the former covenant is sufficient to establish that the plaintiff is in a position to claim an estate or interest in the subject land.

58 However, these findings are not necessarily the end of the matter, for the first defendant relies also upon two ancillary arguments, first, that the caveat sought to be extended is not in the proper form and, second, that the claim to a caveatable interest in the subject land is not sufficient to sustain an absolute caveat in the circumstances of the present case. Accordingly, I must now address these additional issues.

59 I described the form of the caveat in question in earlier discussion. The estate or interest claimed by the plaintiff is put in this way: "as grantee". The caveat's description of the grounds upon which the estate or interest is claimed is given as "a deed agreement dated 10 May 2000". It appears from the caveat document that the documents lodged with the caveat included a deed, although it does not appear specifically that the document in question was the subject deed dated 10 May 2000.

60 Issues concerning the form of caveats have arisen in a number of previously decided cases.

61 In Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419 the purchasers of two home units in a recently completed block lodged a caveat in which the description of the land affected referred to a portion only of the relevant title without greater particularity. The Full Court held that the caveat was in a sufficient form. Malcolm CJ, said that, in his view, the caveat was substantially in the form provided in the 18th Schedule to the Act and sufficiently identified the land sought to be affected, although it may well have been desirable for the Registrar to have required a statutory declaration exhibiting a copy of the strata plan referred to in the caveat. If, on examination, a caveat is found to be defective in that it fails to identify the relevant land or that the claim or interest to an estate cannot be made out, it does not necessarily follow that the caveat has been lodged without reasonable cause.

62 In Leros Pty Ltd v Terara Pty Ltd [1992] HCA 22; (1991) 174 CLR 407 the question was whether the caveat in question sufficiently specified a bank's interest as mortgagee by way of sub-demise so as to satisfy the requirements of s 137 of the Transfer of Land Act.

63 Mason CJ, Dawson and McHugh JJ had this to say at 422 - 423:

"It has been said that the purpose of requiring the caveator to 'specify' the estate or interest claimed is to enable the registered proprietor to know, or find out, the claim which he or she will have to meet. It has also been said that another purpose is to enable the Registrar-General to determine whether a dealing lodged for registration is inconsistent with the estate or interest claimed by the caveator. But, in evaluating the significance of that purpose, regard must be had to the existence of the Registrar-General's power under s 137 to require the caveator to provide a statutory declaration stating the nature of the estate or interest and the title thereto. In the ultimate analysis, it seems to us that 'specify' should be understood in the sense of 'mentioned definitely or explicitly'. Subject to some qualification, that is the meaning adopted by the Full Court of the Supreme Court of Western Australia in Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419."

64 It is material to note that in the Leros case (supra) there was an annexure to the caveat in which the bank recited and identified the grant of the original lease and the subsequent dealings with respect to the lease, concluding with a reference to the mortgage by way of sub-demise. The same members of the High Court were of the view that although the term of the sub-demise did not appear on the face of the caveat, the effect of the annexure was that a person examining the caveat could be left in no doubt as to the extent and nature of the bank's claim which he or she would have to meet if he or she proceeded to registration as proprietor subject to that claim. However, the same could not be said for an option of renewal which was not sufficiently described. Thus, the lease, but not the option, was protected by the bank's caveat.

65 The High Court held also that the registration of a transfer which is expressed to be subject to a caveat within the concluding words of s 137 of the Transfer of Land Act does not validate the estate or interest claimed in the caveat but simply prevents the registration from destroying the estate or interest claimed, if it is valid.

66 In Giacci Bros Pty Ltd v Tyrrell, unreported; SCt of WA; Library No 980106; 18 February 1998 the caveat referred to the estate or interest being claimed "as holder of a profit a prendre'. The caveat also included reference to the matters set out in a statutory declaration.

67 An application to extend the operation of the caveat pursuant to s 138C of the Transfer of Land Act was opposed on the grounds that the interest would not be said to have been sufficiently specified in the caveat unless it was said that the profit a prendre related to the extraction of gravel pursuant to a particular agreement and for a particular term. It was said that the statutory declaration could not cure the defect in the non-specificity of the description. Templeman J acceded to this line of argument because the statutory declaration was extremely vague in its terms. He concluded that no proper caveat had been lodged.

68 The learned Judge went on to say, however, that it was open to him, even if the caveat was of doubtful validity, to make an order restraining the registered proprietor from dealing with the land, pending the resolution of the dispute in an appropriate manner, because under s 138C(2)(a)(iii) the Court had a broad jurisdiction to make such orders as it thinks fit concerning the caveat or the land in respect of which the caveat was lodged. He said further that there was probably little or no difference between the "serious question to be tried" test concerning injunctions and the requirement of the statutory provision that orders may be made if the Supreme Court is satisfied that the caveator's claim "has or may have substance".

69 In the final analysis, he concluded that the plaintiff's claim to a profit a prendre may have substance and that the dispute should be resolved by a trial in the expedited list. He considered that it was appropriate to grant the injunction sought so as to maintain the status quo pending the resolution of the dispute in the expedited list.

70 A similar remedy was provided by White AUJ in Hughan v Gray (supra). He held that there was a serious question to be tried as to whether the plaintiff had a caveatable interest in the property in question, arising from an unregistered mortgage executed by the respondent. He noted that although the balance of convenience is a factor to be considered in an application under s 138 of the Transfer of Land Act, interlocutory removal of a caveat where an arguable case as to the existence of the caveatable interest has been demonstrated, will be unusual. He was satisfied that the caveat was defective in claiming an absolute prohibition and it would therefore be inappropriate to extend the caveat in its present form. He made an order that the caveat should be treated as having lapsed.

71 However, White AUJ went on to make a further order that subject to the filing of an undertaking as to damages in proper form, an injunction be granted until further order restraining the respondent from creating, disposing of or dealing with any estate or interest in the land, unless the creation, disposition or dealing was expressed to be subject to any proprietary estate or interest which the plaintiff may have in the land. Liberty was granted to either party to apply to vary or discharge the injunction on 48 hours notice.

72 Commissioner Buss QC came to a similar conclusion in Jandric v Jandric (supra). In that case he held that the plaintiff's caveat was defective in that it merely stated that the plaintiff claimed "an equitable interest" and did not specify the nature or extent of the interest as required by the approved form. He was of the view, having regard to the decision of Templeman J in Giacci Bros Pty Ltd v Tyrell (supra) that a statutory declaration which supports the lodgement of a caveat cannot cure defects in the form of the caveat.

73 In essence, Commissioner Buss QC was satisfied that the plaintiff had demonstrated that his claim to a caveatable interest in the land raised a serious question to be tried having regard to the evidence concerning the plaintiff's contribution towards certain acquisition and construction costs and that he was favoured by the balance of convenience. However, the form of the caveat was defective. He concluded that the caveat, being defective in form, should not be extended, and nor was it appropriate to grant the plaintiff leave to lodge a further caveat in proper form under s 138D(1) of the Transfer of Land Act.

74 However, Commissioner Buss QC was prepared to grant an injunction until further order restraining the first defendant from creating, disposing of or dealing with any estate or interest in the land, unless the creation, disposition or dealing was expressly subject to any proprietary estate or interest which the plaintiff may have in the land.

75 In Cruz v Osborne [1999] WASC 8 the caveatable interest specified was that of "equitable interest" and this was supported by a statutory declaration. McKechnie J held that the caveat was defective in that it was not sufficiently explicit or detailed because the term "equitable interest" was impossibly wide. However, he went on to consider whether regard could be had to the statutory declaration to make good the omission contrary to the earlier decision of Templeman J. He was of the view that a defect in the actual caveat could be remedied by a statutory declaration because the declaration was available to search by interested parties and was allowed for by the legislation. When regard was had to the statutory declaration read with the caveat, a sufficient estate or interest was identified. The further question then had to be considered whether the facts and matters relied upon supported the claim made. Ultimately, he held that the application for relief should be dismissed because there was no substance in the claim of the caveators as specified in the caveat read with the statutory declaration.

76 I pause to note that in the case before me the caveat is not supported by a statutory declaration. However, as I noted previously, reference is made to "a deed agreement dated 10 May 2000" and there is some evidence before me in the form of an annotation on the caveat itself that the deed in question was lodged with the caveat and can be regarded as a supporting document not unlike the annexure referred to by members of the High Court in the Leros case (supra).

77 Against this background, I consider that if the caveat in the present case were not supported by an accompanying document or statutory declaration then it would be defective because the description "as grantee" is not a sufficient description of the estate or interest claimed. However, in circumstances where the caveat makes explicit reference to the deed dated 10 May 2000 and a copy of the deed is lodged in support of the caveat then there are sufficient materials available to a person searching the title to be put on notice as to the nature of the estate or interest being claimed. I am therefore not prepared to hold that the operation of the caveat should not be extended because the caveat in its present form is defective.

78 Further, even if I be wrong in the view I have just expressed, I consider that there is a serious issue to be tried as to whether the plaintiff has a caveatable interest in the land. Having regard to the broad powers allowed to the Court in regard to an application of the kind before me, and having regard to the previously decided cases such as Giacci (supra), Jandric (supra) and Hughan v Gray (supra). I consider that there is a basis for granting injunctive relief to the plaintiff, subject to resolution of the remaining matter in contention.

79 This was not a matter adverted to directly in the originating summons but an alternative form of relief of this kind was foreshadowed by the plaintiff's submissions and fully debated at the hearing before me with reference being made to the decided cases bearing upon that point. Accordingly, I consider that I am at liberty to address relief of such a kind.

80 In the meantime, I must turn to a further issue raised by counsel for the first defendant, namely, the question of whether a caveat forbidding any dealing with the land absolutely is appropriate in the circumstances of the present case.

81 I begin by noting that under cl 2 of the deed the first defendant acknowledged that the plaintiff was entitled to lodge "a caveat" over the land to protect its rights arising under the agreement. Counsel for the first defendant drew attention to various exchanges between the parties leading up to execution of the deed which arguably suggested the word "absolute" had been consciously excluded and the relevant provision in the deed should be construed accordingly. Again, I am of the view that as the parties ultimately agreed to reduce the entirety of their agreement concerning this matter to a written form I am not at liberty to refer to the earlier correspondence as an aid to interpreting the operative clause.

82 It was held in Harrod v Palyaris Construction Pty Ltd (1973) 8 SASR 54 that words struck out of a contract did not form part of the contract and the Court could not have regard to them as an aid to interpreting substituted words. See also Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 at 352.

83 In the present case, the crucial question is whether the prohibition contained in the caveat is commensurate with the nature of the caveatable interest sought to be protected. It seems to follow from earlier discussion concerning the decision of the High Court in the Leros case (supra) that an interest not covered by the caveat will not be protected. This and other decided cases suggest that if the caveat goes beyond the requirements of the caveatable interest it is not a caveat in respect of the estate or interest claimed.

84 The plaintiff submits that although the effect of the absolute caveat in the present case is to restrict dealings which are not necessarily inconsistent with the plaintiff's rights, this is not automatically fatal to such a caveat. A general prohibition need not be objectionable, even though the caveator's interest is narrow or limited: Ultra Marine Pty Ltd v Misson [1981] ANZ ConvR 229 at 233; George v Biztole Corporation Pty Ltd (1995) V ConvR 54-519 at 66-142; Re Henderson's Caveat [1998] 1 Qd R 632 at 638.

85 In this case, the plaintiff contends, the plaintiff has the right to prevent any subdivision of the property without its consent. It is not simply a right to be notified if there is a subdivision (in which case a subject to notice caveat would be sufficient), nor is it a right to claim damages against a subsequent purchaser who subdivides the property (in which case a subject to claim caveat would be sufficient). A subject to claim caveat would not suffice, as this would not prevent the subdivision from occurring.

86 In Coles KMA Ltd v Sword Nominees Pty Ltd (1986) 44 SASR 120, being a case relied upon by counsel for the plaintiff, the lessee of an unregistered lease lodged a caveat restricting dealings unless they were subject to the lessee's claim. It was held that the caveat made the lease effective against a subsequent purchaser. However, it did not prevent the subsequent dealing itself.

87 This suggests that in the circumstances of the present case, a subject to claim caveat would at most give rise to a cause of action against the parties subdividing, after the subdivision had taken place. This would be contrary to the agreement between the parties reflected in the deed and would defeat the purpose of giving the plaintiff the right to lodge a caveat.

88 Counsel for the plaintiff submitted further that if the Court reached the view that the plaintiff was entitled to a caveat, but was not certain whether it should be an absolute caveat or a subject to claim caveat, it should nonetheless order that the operation of the caveat be extended in its current form, pending a full hearing of the matter. The plaintiff has previously undertaken, and still undertakes, to facilitate all dealings (at its own expense) which are not inconsistent with its right to prevent subdivision of the property. The practical effect of this, as a matter going to the balance of convenience, is to preserve the plaintiff's rights without in any way affecting the first defendant's right to engage in all other types of dealings.

89 Counsel for the defendant relied upon Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 in submitting that a caveator cannot protect more than the interest that is held. He submitted that a caveat will be irregular on its face if it is described as an absolute caveat in circumstances where it should have been framed to protect only a particular interest: Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129 per Burt CJ at 131 and Wickham J at 136.

90 Counsel submitted that in the circumstances of the present case, on any view of the matter, the plaintiff was not entitled to prevent the first defendant from dealing freely with her title provided the nature of the dealing by her or by any successor in title did not amount to an attempt to subdivide the subject land. For this reason the absolute caveat lodged by the plaintiff was defective.

91 Counsel for the first defendant submitted further that although the practical effect of the caveat was to prevent conveyance of title, in strict analysis, the caveat would not necessarily prevent a subdivision of the subject land in that various steps could be taken by the first defendant as registered proprietor to resurvey the land and bring into existence a diagram approved for dealings at the Titles Office. I have to say, however, that without sufficient evidence before me concerning this aspect of the matter, I can make no finding as to what exactly could be achieved by way of subdivision while the caveat remained in position.

92 Upon the basis of the evidentiary materials before me, I am of the view that the plaintiff has an arguable case that the extent of the prohibition reflected in the caveat in its present form does not exceed the requirements of the caveatable interest claimed.

93 I say so for this reason. The caveat in its present form prevents a conveyance of the first defendant's title. To my mind, a reference in the deed to subdividing the land encompasses not only procedural steps leading up to the approval of a diagram which is an order for dealings but also the conveyancing process whereby titles to various portions of the subject land are vested in third parties. If the caveat were simply in the subject to claim form, then, in the event of the land being subdivided, a conveyance could be effected to a third party of a portion of the land, thus leaving the plaintiff as caveator with a claim for damages only against the first defendant or her successor in title. This suggests, in respect of a restrictive covenant prohibiting subdivision, which (on my finding) should be characterised as a proprietary interest binding upon the covenantor's successors in title, that the caveat, of necessity, must be couched in the absolute form in order to be effective. It therefore seems to me that the plaintiff has an arguable case that the caveat in its present form is defensible.

94 In summary, then, I consider that the unregistered restrictive covenant contended for is a caveatable interest. Further, notwithstanding a lack of detail, the estate or interest claimed is arguably described with sufficient particularity on the caveat document. I consider also that the extent of the prohibition claimed, whereby any dealing with the land is forbidden absolutely, does not exceed the requirements of the caveatable interest sought to be protected.

95 It follows from this that the caveat in its existing form should be extended pursuant to the powers allowed to the Supreme Court by s 138C of the Transfer of Land Act. However, consistently with the conventional practice, the plaintiff will be required to commence proceedings for declaratory or other relief within a prescribed time in order to substantiate its interest in the land and its claim to maintain a caveat in the present form. I will hear from the parties as to the form of the orders required to carry this ruling into effect.