7.1.1 Settlement of this contract is conditional upon the Plan being registered by the Registrar of Titles under the Subdivision Act 1988 (Vic) within 18 months from the Day of Sale.

7.1.2 The Vendor must, at the Vendor's sole expense, use its best endeavours to cause the Plan to be prepared and registered.

If the subdivision had not occurred by 21 April 2018, then Hooper had the following rights:

• 7.1.3 ... the Purchaser may at any time after the expiration of the period of 18 months but before the plan is registered avoid this Contract in writing to the Vendor. If this occurs the Deposit and all other money paid by the Purchaser under this Contract will be refunded in full to the Purchaser in addition to any compensation that the Purchaser may be entitled to from the Vendor in respect of any costs, fees, or other expenses paid or incurred by the Purchaser in relation to or arising out of this Contract.

Hooper paid the $1 deposit the same day that the contract of sale was signed. He and Parwan entered into the lease agreement for a period of 24 months from 21 October 2016. The lease agreement provides that, unless terminated in accordance with the Residential Tenancies Act 1997 (Vic), the lease will continue as a periodic tenancy.

On 18 May 2017, Hooper lodged the purchaser's caveat with dealing number AN846531P over [Lot 2] claiming an interest as purchaser.

[Lot 2] was not subdivided by 21 April 2018, and settlement of the contract of sale did not occur. Neither party took any action at that time to vitiate the contract of sale or do anything to suggest that it was no longer on foot.

On 1 June 2018, Parwan executed the charge deed in favour of Hooper to be secured by way of equitable charge over [Lot 2]. The charge deed charges to [Lot 2] the sum of $350,000, which is said to reflect an agreement as to the value of improvements made by Hooper.

On 20 July 2018, Hooper lodged the charge caveat with dealing number AR265272Q over [Lot 2] claiming an interest as chargee based on the charge deed with an absolute prohibition on dealings.[9]

1. Sometime after July 2018, Parwan defaulted on its loan from the bank. On 13 March 2020, the bank appointed Ross Andrew Blakeley and Kathryn Warwick as receivers of Lot 2. The Memorandum of Common Provisions which comprised the terms of the deed of mortgage (the 'mortgage provisions') conferred a power on the bank - once a default notice had been served and the default not remedied within the time allowed - to appoint a receiver to the mortgaged property. That power also existed under statute.[10]
2. Under cl A22.5 of the mortgage provisions, the bank could appoint a receiver to do such of the things listed in the clause as were set out in the receivers' terms of appointment. The receivers' terms of appointment, set out in a deed of appointment dated 13 March 2020, vested in the receivers all the powers able to be conferred under the mortgage provisions as well as powers at law. As listed in cl A22.5, those powers included the power to take possession of the land, manage, sell, lease, subdivide or improve it, and do anything else with the property that an owner could reasonably do.
3. The mortgage provisions also provided that a receiver appointed under those provisions is the agent of the mortgagor (here, Parwan), except where the mortgagor is a company and is in the course of winding up (which is not the case here).
4. Following their appointment, the receivers learned that Hooper was occupying part of Lot 2, and were informed of the contract of sale and lease agreement between Parwan and Hooper. On 16 February 2021, the receivers applied to the Registrar of Titles under s 89A of the Transfer of Land Act 1958 to remove the purchaser's caveat and charge caveat lodged by Hooper, on the basis that Hooper did not have the interests claimed.
5. On 25 March 2021, Hooper filed a writ and general indorsement of claim seeking, among other things:

(a) declarations that:

(i) the contract of sale is valid and enforceable against Parwan (and now the receivers); and

(ii) the caveats are valid and must be maintained on the register;

(b) an order for specific performance of the contract of sale by the receivers; and

(c) an order restraining the receivers from selling Lot 2 until final hearing and determination of the proceeding.

1. On 7 July 2021, Parwan gave Hooper a notice to vacate Lot 2 pursuant to s 91ZZB of the Residential Tenancies Act 1997. The notice stated that Lot 2 was to be offered for sale with vacant possession immediately after a lease termination date of 13 September 2021. Parwan then filed its defence and counterclaim, seeking, among other things, declarations that:

(a) the contract of sale is not amenable to specific performance;

(b) the caveats cannot be maintained and should be removed from the register;

(c) the notice to vacate validly terminates the lease, and Parwan is entitled to vacant possession of Lot 2; and

(d) the receivers are able to sell Lot 2 free of Hooper's claims under the contract of sale and equitable charge.

1. Hooper filed his reply and defence to Parwan's counterclaim, and did not vacate Lot 2. On 10 December 2021, Parwan lodged its application for summary judgment in the proceeding.
2. By its defence, Parwan alleged the contract of sale was not 'capable of being performed' for three reasons. Relevantly, two of those reasons are that:

(a) Lot 2 had not been subdivided and, because of the terms of the relevant planning scheme, it 'is not capable of now being subdivided'; and

(b) Parwan was 'insolvent' and did not have funds to discharge the 'remainder' of the debt secured by the mortgage at the settlement of the sale of the Purchased Land.

1. Hooper replied by taking issue with the first reason and, in relation to the second, alleged that 'the purchase money payable at settlement' would be sufficient to discharge the debt.
2. As stated by the judge in her reasons, the summary judgment application concerned only the issue of whether the contract of sale was incapable of being performed so that there was no real prospect of Hooper obtaining an order for specific performance by Parwan, through the receivers.

1. On 17 June 2022, the associate judge made orders granting partial summary judgment in Parwan's favour. Critically, the associate judge did so on those aspects of Hooper's claim and Parwan's counterclaim concerned with specific performance of the contract of sale, finding that the contract is not amenable to such relief.[11]
2. The associate judge characterised the question of whether the contract is amenable to specific performance as turning on 'two fundamental matters':

The first is whether or not [Lot 2] can be subdivided, and the second is whether settlement of the Contract of Sale is possible, given the [bank's] attitude to the sale and in particular whether the Mortgage will be discharged.[12]

1. On the first of these issues, the associate judge noted that Lot 2 had not been subdivided, Parwan - through the receivers - was unwilling to set the process of subdivision in train, and the bank firmly resisted the sale of the Purchased Area to Hooper.[13] In such circumstances, the associate judge said, specific performance 'would likely require the Court to carry out a supervisory role, which is usually a reason not to grant specific performance'.[14] The associate judge also noted that even if Parwan did take steps toward it, achieving subdivision was not within its control.
2. The associate judge then turned to the issue of the mortgage, and specifically, the question of 'whether Parwan could deliver clear title to Hooper at settlement by redeeming the mortgage'.[15] First, the associate judge acknowledged that the mortgage was first in time and takes priority over any interest held by Hooper as purchaser under the contract of sale. Next, the associate judge referred to evidence demonstrating that the purchase price due under the contract - $900,000 - was insufficient to satisfy the balance of the mortgage ($1,165,058 as at 3 December 2021).[16] That being the case, the associate judge found that:

... in view of the reality that performance of the Contract of Sale will require a discharge of the Mortgage from [the bank] in circumstances where [the bank] is not likely to be paid out from the sale proceeds and does not consent to the sale, it cannot be said that the Contract of Sale is specifically performable.[17]

1. Drawing together the two strands of her analysis, the associate judge concluded:

Taken together, but with the emphasis being on the fact that settlement of the Contract of Sale will not be able to occur as the Mortgage will not be discharged at settlement, these barriers are such that Hooper's claim for specific performance of the Contract [of] Sale has no real prospect of success.[18]

1. In addition, the associate judge concluded that the caveats ought to be removed, and that the lease had been validly terminated.[19]

1. Hooper appealed the associate judge's ruling.
2. On 2 May 2023, the judge gave reasons in which she concluded that the associate judge had erred in finding that relief in the nature of specific performance had no real prospect of success. In reaching this conclusion, the judge considered the same key matters identified before the associate judge - that is, '(1) whether or not [Lot 2] can be subdivided; and (2) whether settlement of the contract of sale is possible'.[20]
3. On the first of these issues, the judge noted that the fact that the contract of sale was conditional upon subdivision of Lot 2 is not, as a matter of principle, a ground to refuse specific performance.[21] Whether subdivision could occur was a 'matter of contested fact', and it was for Parwan to demonstrate - as it submitted - that the applicable planning scheme did not permit subdivision of Lot 2 to create a separate title for the Purchased Land.[22]
4. The judge found that there was minimal evidence to support Parwan's assertion. Rather, the evidence rose no higher than that Parwan had not taken steps to progress subdivision, and was unwilling to do so - merely demonstrating Parwan's breach of contract.[23] The judge concluded that while Parwan's unwillingness may present a 'significant barrier to settlement, that unwillingness is itself irrelevant to the question of whether subdivision can be obtained',[24] and 'caution must be taken before concluding that subdivision cannot occur'.[25]
5. The judge then turned to the second issue - namely, 'whether the bank's prior indefeasible title and its refusal to consent to the sale unless its mortgage is discharged meant Hooper had no real prospect of obtaining specific performance'.[26] The judge dealt with this issue as follows:

There was no dispute that the bank's mortgage was first in time, nor that the amount owing by Parwan was greater than the purchase price for the purchased area. Her Honour accepted that this issue posed the greater barrier to Hooper's prospects of success. On its own her Honour found that this was sufficient to say that the contract was not specifically performable.

This is undoubtedly correct if the proceeds from the contract of sale of the purchased area were the only means of discharging the mortgage. But that premise is false. The mortgage is secured by the whole of the Property. The sale is conditional upon the Property being subdivided into two or more titles, all of which are capable of being sold (including the contract of sale to Hooper) in discharge of the mortgage. Hooper's submission is that on the evidence relied on by Parwan the Property without subdivision is valued around $1,700,000 - an amount that exceeds the mortgage liability. The critical question is not whether the discharge can occur from the contract of sale [of] part of the Property created by a new title but from the sale of the Property overall.

I am satisfied that on this question her Honour fell into error. The prospect of success was analysed on the basis that the settlement of the purchased area could not discharge the mortgage which has priority. That is clearly correct as a matter of mathematics. However, as Hooper submitted, the question is to be asked on the basis that settlement will only occur because the subdivision has been registered. Parwan did not address the situation where it would remain the registered proprietor of the balance of [Lot 2] after subdivision, nor its inability to discharge its mortgage by the sale of the balance of [Lot 2] or otherwise ... The question of the bank's attitude to the discharge of its mortgage was to be approached on the basis that the subdivision can or could occur such that the contract of sale could settle with Parwan holding title to the balance of [Lot 2].[27]

1. Concluding that Parwan had failed to show that specific performance was not a legally available remedy or that it was factually impossible, the judge made orders allowing Hooper's appeal. The judge vacated the orders made by the associate judge and dismissed Parwan's application for summary judgment.[28]

1. By its proposed ground of appeal, Parwan contends that the judge erred by relying on a finding that Parwan could compel the bank to provide a partial discharge of mortgage in respect of the Purchased Land once it was subject to subdivision.
2. In written submissions, Parwan took issue with the judge's reasoning, and in particular with the passages italicised above at [38]. Asserting that these statements were incorrect, Parwan submitted that the 'true position' could be summarised as follows:

(a) The bank, as registered mortgagee, was at all times the registered proprietor of 'land' within the meaning of s 42(1) of the Transfer of Land Act 1958. The mortgage was, therefore, indefeasible in the manner set out in that provision.

(b) The mortgage provisions, which form part of the registered mortgage, record Parwan's obligation to pay the 'Amount Owing' under the mortgage. Clause A2.5 of those provisions states that '[w]hen there is no Amount Owing we [the bank] will release the Property from this mortgage when you ask us to do so'.

(c) The mortgage secures the whole Amount Owing, not part of it.

1. Thus, Parwan submitted, at all times its obligation was and remains to pay the Amount Owing in full. Until that is done, it cannot say that it has redeemed the mortgage and cannot assert a right to title free of the mortgage. Clause A2.5 of the mortgage provisions, which contains the bank's relevant obligation, cannot be triggered at a proposed settlement of the contract of sale because of the shortfall between the mortgage liability and the purchase price. The bank is not obliged to provide a discharge of mortgage, partial or otherwise, without payment of the whole amount owing. Therefore Parwan cannot convey clear title. In these circumstances, specific performance would be futile and is therefore not available.
2. In oral submissions, Parwan eschewed any reliance upon problems or uncertainty in obtaining the registration of a plan of subdivision. Instead, Parwan focused on the practical problems in obtaining a discharge of the mortgage at settlement of the Purchased Land, even after subdivision, due to the fact that the balance of the purchase price payable at settlement would be insufficient to discharge the mortgage debt.
3. As mentioned, although Hooper did not present arguments in opposition to the application for leave to appeal, we have taken notice of submissions he made before the associate judge and the judge. In short, they were summarised by the judge as follows:

As to the indefeasible title of the bank barring settlement of the contract of sale, Hooper submitted that both the receivers' and the bank's present attitudes were immaterial considerations. Hooper submitted that if matters progressed to the point of settlement, then the ability to discharge the mortgage at that time would present a very different factual situation - principally that Parwan would hold more than one title to [Lot 2]. Parwan did not lead any evidence that the receivers could not otherwise discharge the mortgage liability, whether from sale of the remainder of [Lot 2] or by refinancing with the balance of [Lot 2] retained as security. Indeed, the evidence established that the likely value of [Lot 2] without subdivision was estimated to be worth $1,700,000, comfortably in excess of the mortgage liability.

In substance Hooper submitted that the possibility of subdivision and the ability to settle the contract of sale upon subdivision both raised contested questions of fact, the resolution of which would be relevant to the discretionary decision of whether or not to withhold an entitlement to specific performance in favour of a purchaser under a valid contract. In Hooper's submission, the Associate Judge effectively determined these matters of controversy between the parties as if at trial, as illustrated in particular by paragraph [59] of her Honour's reasons and the reference to the weight of evidence.

Hooper submitted that specific performance is not precluded in principle by a need to obtain subdivision of title, and nor is the consideration that a purchaser has bought land for subdivision or development a basis for refusing specific performance.

Hooper accepted that the remedy may not be granted in circumstances where specific performance would require a continuing supervisory role by the court, but submitted that Parwan had not discharged its onus to show that the degree of supervision that might be required was such that the relief would be refused. Hooper submitted that the specific performance is directed at achieving a result (the registration of title) rather than an ongoing activity or contract for personal services and there is nothing to suggest that the receivers as professionals would not act in accordance with any order for specific performance.[29]

1. Under s 63(1) of the Civil Procedure Act 2010, a court may grant summary judgment in a civil proceeding if satisfied that:

a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.[30]

1. These powers are in addition to and do not derogate from any other powers of summary disposal which the court has under the rules of court.[31]
2. The principles to be applied in determining whether to grant summary judgment are well-established, and were not in dispute below. In Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[32] this Court set out the relevant test as follows:

(1) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a 'real' as opposed to a 'fanciful' chance of success;

(2) the test is to be applied by reference to its own language and without paraphrase or comparison with the 'hopeless' or 'bound to fail test' essayed in [General Steel Industries Inc v Commissioner for Railways (NSW) ('General Steel')];[33]

(3) it should be understood, however, that the test is to some degree a more liberal test than the 'hopeless' or 'bound to fail' test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent's case is not hopeless or bound to fail, it does not have a real prospect of success;

(4) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.[34]

Nature of a mortgage registered under the Transfer of Land Act 1958

1. A mortgage registered under the Transfer of Land Act 1958 has effect as a security and is 'an interest in land'.[35] The mortgagee's interest in the land is created upon registration of the instrument of mortgage.[36] A 'registered proprietor' is defined in the Transfer of Land Act to mean a person who by a registered instrument is the proprietor of an estate or interest in land.[37] It follows that upon registration of an instrument of mortgage under the Transfer of Land Act the mortgagee becomes the registered proprietor of a security interest in the land.
2. Except in the case of fraud, the registered proprietor of land (which includes a registered mortgagee) holds such land absolutely free from all encumbrances, with two exceptions that do not apply in the present case.[38] Nevertheless, the registered instrument is subject to various specified rights, only one of which is relevant in the present case - namely, the interest of a tenant in possession of the land.[39]
3. Until the discharge from the whole of the money secured by the mortgage, the registered first mortgagee has the same rights in law and equity as were possessed by a mortgagee of general law land in whom the legal interest in the land was vested (with the mortgagor retaining the right to quiet enjoyment of the land until default).[40] A mortgagee of land under the Transfer of Land Act has, upon default in payment of the principal sum or interest secured by the mortgage, statutory powers to enter the land,[41] and to sell the land in the enforcement of its security interest.[42]

1. Instead of itself entering into possession and selling the land, a mortgagee may elect to appoint a receiver to the mortgage land and vest that receiver with powers to sell the land.[43] Where a mortgage is made by deed (as it was in this case), and the mortgagee has become entitled to exercise the power of sale, the mortgagee has a statutory power to appoint a receiver.[44]
2. Apart from the statutory power to appoint a receiver, the power to appoint a receiver may be conferred by the provisions of the mortgage itself. In this case, the mortgage provisions conferred a power on the bank, once a default notice had been served and the default not remedied within the time allowed, to appoint a receiver to the mortgaged property (Lot 2).
3. As previously stated, the mortgage provisions in the present case provided that any receivers appointed under them would be the agent of the mortgagor. This type of agency has been described as a 'special and limited agency'.[45] In Visbord v Commissioner of Taxation (Cth),[46] Williams J explained that, although receivers are in law the agent of the mortgagor, they occupy 'a very special position'.[47] For example, they are appointed to and may be removed from office by the mortgagee. Justice Williams enumerated a number of ways in which receivers may act independently of the mortgagor or at the direction of the mortgagee.[48]
4. In like manner, in Sheahan v Carrier Air Conditioning Pty Ltd,[49] Brennan CJ explained this special and limited agency.[50] He said that although a receiver appointed with powers of the kind conferred under the mortgage provisions in this case is the agent of the debtor company, the receiver is not treated as an ordinary agent of the company. In exercising powers (including the power of sale of the company's assets) conferred for the purpose of the realisation of the security by the mortgagee, his Honour continued, '[t]he receiver is appointed not for the benefit of the company but for the benefit of the mortgagee'.[51]

1. Specific performance in the narrow and strict sense assumes there is an executory or preliminary agreement to do something that will put the parties in the legal position in which the agreement intended them to be placed.[52] For example, in respect of a contract for the sale of land, specific performance may be ordered to compel the vendor to execute and deliver a transfer of the sold land to the purchaser to enable that purchaser to become the registered proprietor of the land.[53]
2. Enforcement of the performance of the provisions of an executed contract is not specific performance in this strict sense. It is merely the enforcement of the executed contract. However, such enforcement has been described as 'relief approximate to specific performance'.[54] Mostly, but not entirely, the distinction between these two senses in which specific performance is to be understood makes little difference in practical application.[55]
3. Specific performance is not available if damages are an adequate remedy.[56] However, a contract for the sale of land is a well-recognised example of a contract for which damages are generally an inadequate remedy when a vendor fails to complete the sale.[57]
4. One recognised defence to the suit for specific performance is that the fulfilment of the contract is likely to result in the continual supervision of the court.[58] The possibility of supervision is not an automatic bar to suit. Much will depend on the period of time over which the obligations are to be performed, the number of terms to be performed, and the detail or complexity of them.[59] Courts often exercise a supervisory jurisdiction on applications made by trustees, receivers and administrators. Vendors have been ordered to complete a contract of sale, even though doing so requires the vendor to use best endeavours to register a plan of subdivision.[60] The prospect of some need for supervision in those circumstances has not prevented an order for specific performance.
5. Further defences to the suit of specific performance include the impossibility of performance and futility. The difference between the two has been described in these terms:

On the one hand, questions of impossibility of performance arise where there is a prospect that it will not be within the power of the defendant to comply with the proposed order of the court. On the other hand, questions of futility of performance arise where there may not be a sufficiently high probability that the making of the proposed order will provide a sufficient benefit to the plaintiff to render that order just in all the circumstances.[61]

1. The rationale for the defence of impossibility is that equity will not specifically enforce what cannot be done. An example of such an impossibility is where the performance of the contract requires the consent of a third party and it appears that such consent cannot be obtained.
2. A vendor of land must use best endeavours to obtain any necessary consent to the sale and, if necessary, to take proceedings to obtain it.[62] A court might even make specific performance conditional upon such consent being obtained. But if it is sufficiently clear that the appropriate consent will not be able to be obtained, no order for specific performance should be made and the parties are left to other remedies.[63] In Dillon v Nash,[64] Scholl J held, after citing Fry on Specific Performance (6th ed) and cases cited therein, that 'specific performance will not be refused on the ground that the consent or licence of a third party is necessary, unless it further appears that it cannot be obtained'.[65]
3. The final defence to be considered is that of hardship; specifically, hardship suffered by a third party. In some circumstances, hardship suffered by a third party will afford a defence to a suit for specific performance.[66] An example of a situation in which the interest of a third party may be taken into account is where specific performance is sought of a contract of sale of an interest in land which, if performed, would be prejudicial to another person interested in the property but not party to the relevant contract.[67]
4. The court will also regard as relevant the probability that specific performance will involve a breach of contract with a third person and may, on discretionary grounds, decline to make an order that has that effect.[68]

Equitable interest of a purchaser under a contract of sale of land

1. It is relevant to consider the nature of Hooper's interest, if any, in the land at the present time. It is often said that a purchaser of land under a contract of sale thereby acquires an equitable interest in the property. As Spry explains:

But in truth the statement that the purchaser has acquired equitable property can mean no more in this context than that he has acquired certain equitable rights to the specific performance of the contract and that his rights to specific performance and related rights extend, for example, to rights to obtain injunctions and other such relief against the vendor and third persons in appropriate circumstances. ... So under a specifically enforceable contract of sale of land an equitable interest is created immediately.[69]

1. In other words, in this context a purchaser's equitable interests are commensurate with the protection which equity will afford them.[70]

1. The ultimate question before the associate judge and the judge was whether there is a real as opposed to a fanciful prospect that, at the trial of this proceeding, the court will order that Parwan, through the receivers, specifically perform the contract of sale. As framed by the judge, that question was, in turn, informed by whether or not the contract of sale was incapable of being performed. Analysed by reference to the principles above, the question was whether the defence of impossibility (or perhaps futility) must succeed. Before both judicial officers, the parties argued that issue by reference to the possibilities that: (1) the land will be subdivided, and (2) the mortgage will be discharged to enable completion of the sale. These issues reflected the pleaded defences.
2. In this particular case, the factual circumstances in which the court at trial would exercise its discretion include that:

(a) the bank (not a party to the proceeding) is the registered proprietor of a first mortgage over Lot 2 and has an indefeasible legal security interest in that land;

(b) by contract of sale made after the registration of the bank's mortgage, Parwan sold to Hooper a part of Lot 2, namely the Purchased Land, conditional upon the registration of a plan of subdivision that creates a title for that part;

(c) the contract of sale was made without the bank's consent such that Parwan's entry into it was, and its performance by Parwan would be, in breach of the mortgage;

(d) following Parwan's default under the mortgage, the bank appointed receivers over the land, in accordance with the mortgage, to enforce the bank's security interest;

(e) the receivers wish to sell Lot 2;

(f) the receivers have given Hooper a notice to terminate his lease over the Purchased Land;

(g) no plan of subdivision has been registered in respect of Lot 2 and it cannot be assumed that a plan can or will be registered;

(h) Parwan may well have breached its obligation to use its best endeavours to obtain the registration of the plan;

(i) the bank is not obliged to discharge the mortgage over Lot 2 until it is paid the whole of the amount owing under it;

(j) the sum owing to Parwan under the contract of sale of the Purchased Land is and will be insufficient, of itself, to discharge the debt owed to the bank under the mortgage; and

(k) after the commencement of the proceeding the bank confirmed in writing by a letter to the receivers that it does not consent to the sale of part of the property to Hooper.

1. In the present case, an order for specific performance in the strict sense would be an order that Parwan execute and deliver to Hooper a transfer of the subdivided portion of Lot 2 corresponding to the Purchased Land. However, before that can be done, certain promises made by Parwan in the contract of sale also have to be performed.
2. First, Parwan must use its best endeavours to prepare and register a plan of subdivision which contains a lot that corresponds with the Purchased Land (the 'subdivision obligation'). Secondly, assuming those reasonable endeavours achieve a registered subdivision, Parwan must procure the bank to provide, at settlement, an executed discharge of the mortgage over Lot 2 so that Hooper can register his proprietorship of the Purchased Land free of any encumbrance (the 'mortgage discharge obligation').
3. For Parwan to procure that discharge of mortgage, Parwan must either pay out the whole mortgage debt secured by Lot 2 at or by the time of settlement - in which case it could 'compel' the bank to provide the discharge - or persuade the bank to at least partially discharge the mortgage without being able to pay out the whole debt. In this sense, the completion of the contract depends on Parwan's ability to compel the bank (a third party to the contract of sale) to discharge the mortgage at least in part, or the bank consenting to doing so.
4. Parwan's proposed ground of appeal contends that the judge erred by relying on a finding that Parwan could 'compel' the bank to provide a partial discharge of the mortgage of Lot 2. Nowhere does the judge make any finding in those actual terms. On its face, the ground appears to erect a 'straw person'. Nevertheless, if there was no prospect of the bank agreeing to provide a discharge of mortgage when it did not otherwise have to do so, the only way the contract could be completed was for Parwan to pay out the mortgage debt so as to compel the bank to provide the discharge.
5. As previously summarised, the associate judge considered the enforcement of both the subdivision obligation and the mortgage discharge obligation. On appeal, the judge noted the way in which, before the associate judge, Parwan had addressed the difficulties of performing the subdivision obligation as a potential obstacle to Hooper obtaining an order for specific performance. The judge noted that, in answering points raised by the associate judge about that step, Parwan digressed by submitting that such a step would be futile because of the bank's intention to withhold consent to the sale in any event.[71]
6. The judge treated the issue raised by the performance of the subdivision obligation as a question of whether or not it had been established as a matter of fact that subdivision 'could not occur'.[72] Finding that Parwan had not established that subdivision could not occur, the judge turned to the mortgage discharge obligation as the lens through which to evaluate the prospect of Hooper obtaining an order for specific performance. In effect, the judge assumed that the performance of the subdivision obligation will be successfully navigated. Similarly, as already mentioned, before this Court, Parwan eschewed reliance upon any difficulty in obtaining a plan of subdivision and, instead, concentrated its submission on the prospect that, even after any subdivision, Parwan would obtain a discharge of mortgage at settlement.
7. In this way, the question for the judge became whether 'the bank's prior indefeasible title and its refusal to consent to the sale unless its mortgage is discharged meant Hooper had no real prospect of obtaining specific performance'.[73] Thus, the judge identified the critical question and drew her conclusion as set out above at [38]. It is necessary to examine the judge's reasoning toward her conclusion in some more detail.
8. The judge reasoned to her conclusion as follows:[74]

(1) the amount owed by Parwan to the bank was greater than the amount to be received from Hooper for the Purchased Land;

(2) the contract would not be specifically performable if the proceeds from the sale of the Purchased Land were the only means of discharging the mortgage;

(3) however, after subdivision into two or more lots, all the subdivided titles (including the Purchased Land) would be available for sale in discharge of the mortgage (noting that the value of Lot 2 alone was more than enough to discharge the mortgage);

(4) the point, therefore, is not whether the discharge could occur from the sale of only the Purchased Land, but of the subdivided Lot 2 overall;

(5) the bank's attitude to discharging its mortgage was therefore to be approached on the basis that, once subdivision had occurred, the contract would settle 'with Parwan holding title to the balance' of Lot 2;

(6) Parwan's evidence did not address the situation where it would remain the registered proprietor of the balance of Lot 2, or its ability to discharge its mortgage from the 'sale of the balance of [Lot 2] or otherwise';

(7) thus, by implication, Parwan did not dispel the possibility that the bank would consent to the discharge of its mortgage once subdivision had occurred, and so did not exclude a real prospect that, at trial, Hooper could obtain an order for specific performance of the contract.

1. On close analysis, this reasoning appears to assume that, once subdivision has been obtained, the bank might (and perhaps should) consent to give a discharge of the mortgage insofar as it affects the lot comprising the Purchased Land (ie. a partial discharge of the mortgage), even though the sale of the Purchased Land would not give the bank enough to discharge the mortgage debt over the whole of Lot 2. It might or should do that because, after settling with Hooper, Parwan would be the registered proprietor of other saleable lots from which further money could be obtained to pay out the bank. Whilst not specifically acknowledged, to do so would presumably require Parwan and the bank agreeing to another mortgage or mortgages to secure to the bank the residual amount owing.[75]
2. The judge did not suggest that the bank must release the mortgage, nor that Parwan could compel the bank to do so despite the bank not receiving the whole amount. But, because, hypothetically, the bank might agree to do so, the judge considered that that possibility met the argument that specific performance had no reasonable prospect of success.
3. Yet, the uncontradicted facts were that:

(a) the bank had an undisputed entitlement to maintain the mortgage until the full amount owing was paid to it;

(b) Parwan had defaulted on the loan and as a consequence the bank had appointed receivers to sell Lot 2;

(c) the receivers had terminated Hooper's lease so they could sell Lot 2;

(d) the receivers sought the removal of the caveats so they could sell Lot 2;

(e) the bank confirmed its instructions to the receivers that it was not given notice of the contract of sale and that it did not consent to the sale; and

(f) the receivers (on the bank's instructions) resisted specific performance and sought orders clearing the way to sell Lot 2 immediately, free of encumbrances.

1. The proposition that, in order for Parwan to show Hooper's lack of real prospect of obtaining an order for specific performance, Parwan should also show that the bank would not consent to the sale, which it was not obliged to do, after a subdivision that it did not want to pursue and was actively resisting, seems somewhat fantastic and artificial. In any event, we consider that the proper inference from the evidence was that the bank would not give such consent. This suffices to require that the appeal be allowed.
2. In that context, Parwan's complaint in its proposed ground, that the judge wrongly assumed that Parwan 'could compel the mortgagee to provide a partial discharge of mortgage in respect of the purchased area of the property once subject to subdivision', makes more sense. Implicitly, the ground challenges the significance the judge attached to the prospect that the bank might agree to discharge the mortgage once subdivision had occurred, by directing attention to the prospect of compelling it to do so otherwise.
3. For these reasons, the judge ought not to have allowed the appeal from the associate judge's decision on the basis that, in order to demonstrate Hooper's lack of a real prospect of obtaining an order for specific performance of the contract of sale, Parwan was required, but failed, to expressly address the bank's attitude to a partial discharge of mortgage on the assumption that a plan of subdivision had been registered.
4. In any case, there is a more fundamental problem for Hooper obtaining an order for specific performance which does not appear to have been fully addressed, although aspects of the argument were alluded to in both sets of reasons. We think it should be addressed lest it be thought it has been overlooked.
5. The bank has an indefeasible interest as mortgagee and a present intention to sell the land, through the receivers, to enforce its registered security. Its interest as mortgagee clearly has priority over any interest Hooper may have in the Purchased Land. On the facts of this case, Hooper's potential equitable interest - to the extent the contract of sale may be amenable to an order for specific performance - cannot defeat the bank's immediate entitlement to enforce its legal interest as registered mortgagee.[76]
6. An order for specific performance would inevitably cause hardship to the bank because, as registered mortgagee, the caveats referable to Hooper's right to specific performance would prevent the bank from recovering the mortgage debt while the receivers pursue the registration of a plan of subdivision for Lot 2 (presumably funded by the bank to do so). The bank will then have to wait to see whether the subdivided lots (including the Purchased Land) can be sold in such a sequence that the whole of the amount owing under the mortgage is recovered before the mortgage is discharged. All of this is to occur to safeguard the interest of a subsequent, unregistered interest-holder (Hooper), contrary to Parwan's obligations under its mortgage, in preference to the immediately exercisable rights of the prior registered proprietor (the bank). To make an order having that effect would upend priorities in the Torrens title system, by putting Hooper's interest ahead of that of the bank.
7. Hardship to a third party is a recognised reason for declining to exercise the discretion to order specific performance.[77] In the circumstances of this case, hardship of a kind which would defeat the bank's immediately exercisable right pursuant to a prior, legal interest in the land would, as a matter of virtual certainty, lead a court to decline to grant an order for specific performance.
8. On this basis, also, there could be no real prospect that Hooper would obtain an order for specific performance at trial. The judge therefore erred in setting aside the associate judge's order.

1. It follows that there should be summary judgment for Parwan against Hooper in respect of Hooper's claim for specific performance of the contract and his claim for injunctions restraining the receivers from selling the Purchased Land. It also follows that, as ordered by the associate judge, there should be summary judgment for Parwan on its counterclaim against Hooper and orders that enable the sale of the Purchased Land (including orders for the removal of the caveats), prescribe what should happen with the proceeds of sale and otherwise deal with costs and the proceeding generally.
2. Leave to appeal will be granted and the appeal allowed. The order of the judge allowing Hooper's appeal and setting aside the orders of the associate judge must be set aside.

[1] Hooper v Parwan Investments Pty Ltd (recs apptd) [2022] VSC 285 ('Associate Judge Reasons').

[2] Hooper v Parwan Investments Pty Ltd (recs apptd) [2023] VSC 227 ('Judge Reasons').

[7] Hooper failed to file either a written case in response to Parwan's application for leave to appeal or a notice that he did not intend to respond to or contest Parwan's application as required by r 64.11 of the Supreme Court (General Civil Procedure) Rules 2015. On 4 August 2023, the Judicial Registrar advised the parties that the application would proceed unopposed.

[8] Associate Judge Reasons, [8]-[19]; Judge Reasons, [10]-[31].

[10] See below [51].

[11] Associate Judge Reasons, [65], [94].

[27] Ibid [92]-[94] (emphasis added).

[29] Ibid [70]-[73] (citations omitted).

[30] Civil Procedure Act 2010, s 63(1).

[31] Ibid s 65.

[32] (2013) 42 VR 27; [2013] VSCA 158 ('Lysaght').

[33] (1964) 112 CLR 125; [1964] HCA 69.

[34] Lysaght [2013] VSCA 158; (2013) 42 VR 27, 40 [35] (Warren CJ and Nettle JA, Neave JA agreeing in part at 42 [40]-‍[42]); [2013] VSCA 158.

[35] Transfer of Land Act 1958, s 74(2).

[36] Ibid s 40(1).

[37] Ibid s 4(1).

[38] Ibid s 42(1).

[39] Ibid s 42(2).

[40] Ibid s 81(1).

[41] Ibid s 78(1).

[42] Ibid s 77.

[43] Clyde Croft and Jan Johannsson, The Mortgagee's Power of Sale (LexisNexis, 2nd ed, 2004) 101.

[44] Property Law Act 1958, ss 86, 101(1)(c), 102, 109(1).

[45] James O'Donovan, Company Receivers and Administrators (LBC Information Services, 2nd ed, 1992) [10.50].

[46] (1943) 68 CLR 354; [1943] HCA 4.

[49] (1997) 189 CLR 407; [1997] HCA 37.

[52] JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (LexisNexis, 5th ed, 2014) [20-005] ('MGL Equity'); ICF Spry, The Principles Of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages (Sweet & Maxwell, 9th ed, 2013) 53 ('Equitable Remedies').

[53] Heydon, Leeming and Turner, MGL Equity [20-010].

[54] Ibid; Pakenham Upper Fruit Co Ltd v Crosby [1924] HCA 55; (1924) 35 CLR 386, 394 (Isaacs and Rich JJ); [1924] HCA 55.

[55] Heydon, Leeming and Turner, MGL Equity [20-020].

[57] Dougan v Ley [1946] HCA 3; (1946) 71 CLR 142, 150 (Dixon J); [1946] HCA 3; Patel v Sengun Investment Holdings Pty Ltd [2023] VSCA 238, [96]-[103] (Emerton P, Walker and Kaye JJA). See also Heydon, Leeming and Turner, MGL Equity [20-035]; Spry, Equitable Remedies 311.

[58] JC Williamson Ltd v Lukey [1931] HCA 15; (1931) 45 CLR 282, 297-8 (Dixon J); [1931] HCA 15; Heydon, Leeming and Turner, MGL Equity [20-065].

[59] Heydon, Leeming and Turner, MGL Equity [20-065]-[20.070].

[60] For example, see JAG Investments Pty Ltd v Strati [1973] 2 NSWLR 450; AJDJ Pty Ltd v Pacific West Developments Pty Ltd [2002] NSW ConvR 56-015; [2001] NSWSC 1174; Rehins Pty Ltd v Debin Nominees Pty Ltd (No 2) [2011] WASC 168, [213] (Murray J).

[62] Heydon, Leeming and Turner, MGL Equity [20-140].

[64] Dillon v Nash [1950] VicLawRp 34; [1950] VLR 293.

[66] Heydon, Leeming and Turner, MGL Equity [20-110]; Spry, Equitable Remedies 208-9.

[67] Thomas v Dering [1837] EngR 595; (1837) 1 Keen 729; 48 ER 488, 495 (Lord Langdale MR); Heydon, Leeming and Turner, MGL Equity [20-110].

[68] Spry, Equitable Remedies 159-160; Warmington v Miller [1973] QB 877, 886 (Stamp LJ, Davies and Cairns LJJ agreeing at 888).

[69] Spry, Equitable Remedies 689. See also Howard v Miller [1915] AC 318, 326 (Lord Parker of Waddington); Central Trust and Safe Deposit Co v Snider [1916] 1 AC 266, 271-2 (Lord Parker of Waddington).

[70] Hewett v Court (1983) 149 CLR 639, 665 (Deane J); [1983] HCA 7; Brown v Heffer [1967] HCA 40; (1967) 116 CLR 344, 349 (Barwick CJ, McTiernan, Kitto and Owen JJ); [1967] HCA 40. See the less restrictive view in Legione v Hately [1983] HCA 11; (1983) 152 CLR 406, 446 (Mason and Deane JJ); [1983] HCA 11; Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489, 522 (Deane and Dawson JJ); [1988] HCA 51. See discussion in Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315, 330-335 (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ); [2003] HCA 57.

[75] Perhaps other possibilities were also envisaged, although not specified. For example, hypothetically, another lot could be sold first which yields enough to discharge the whole mortgage debt. Or, a series of sales could be settled simultaneously which yield, in aggregate, enough to discharge the whole mortgage debt. Parwan might refinance the debt. There is no reason at present to think these situations will eventuate. These scenarios are wholly speculative and involve unknowable degrees of likelihood. Adding further speculative possibilities to the uncertain chance that a subdivision might be achieved only clouds the overall prospect that the contract of sale will be completed. But, for other reasons stated below, it does not assist to engage in this hypothetical speculation.

[76] There was no suggestion that the bank was affected by any equity which might cause its interest to be postponed to that of Hooper.

[77] See above, [62].