Szanto v Bainton & Ors

JUDGMENT 1HIS HONOUR : This is an application for further extension of a caveat dated 5 May 2010. The plaintiff is the caveator. The first and second defendants are the registered proprietors of the affected land. The property in question is situated in Riley Street, Woolloomooloo. The plaintiff claimed an interest described as follows: " Option to purchase, without recourse, property described herein ". 2The interest was said to arise under an instrument described as " Purchase Contract 9 March 2010 ". The facts said to give rise to the interest were described as " Purchase and Option ". 3An application for extension of the caveat is approached as if the caveator were seeking an interlocutory injunction to restrain the registered proprietor from dealing with his or her land. The caveator must show that there is a serious question to be tried that he or she has an interest that supports the caveat. If so, the question is whether the balance of convenience favours maintenance of the caveat. The adequacy of the undertaking as to damages the caveator will be required to proffer is highly relevant to the decision whether the caveat should be allowed to remain ( Lew v Bluescope Distribution Pty Ltd [2010] NSWSC 794 at [5] and cases there cited). 4On or about 10 March 2010 the first and second defendants entered into a " Put and Call Option " with a Mr Troy Douglas ("the Option Agreement"). The first and second defendants were defined as the " Vendor ". Mr Douglas was described as the " Purchaser ". The deed provided that " the Purchaser includes the Purchasers [sic] ... permitted assigns. " By clause 1 the Vendor granted to the Purchaser or his nominee an option to purchase the Property at the price and on the terms and conditions contained in a contract attached to the deed. The consideration for the grant of the option was $20,000 paid by the Purchaser to the Vendor at the time of execution of the deed and the sum of $10,000 to be payable on exercise of the option. The option could be exercised up to 8 July 2010. Clause 3 provided that if the Property were sold the fees of $30,000 in total would be credited to the price. The clause also provided that if the option were exercised but the sale of the property was not completed, the Option Fee (of $20,000) and the Option Exercise Fee ($10,000) would be forfeited to the Vendor. Clause 11 provided: "As at the date of this Deed, the Purchaser is the occupier of the Property in terms of a continuing Residential Tenancy Agreement between the Purchaser and the Vendors. The parties have agreed that the Purchaser shall continue to occupy the Property under and in terms of and fulfilling all of his obligations contained in the provisions of the continuing Residential Tenancy Agreement from the date of this Deed to the Completion date specified in the Contract SAVE that provided the Purchaser is not in breach of any of the other terms of the Residential Tenancy Agreement, the Rent which would otherwise be payable by the Purchaser to the Vendor in terms of the continuing Residential Tenancy Agreement shall not apply for that period." 5On about 30 March 2010 Mr Douglas and the plaintiff (the Nominee) entered into an agreement. The agreement provided that in consideration of the Nominee paying a fee of $22,900 and legal costs of $1,800 to the Purchaser, the Purchaser agreed irrevocably to nominate the Nominee as the Purchaser under the contract for the sale of the property annexed to the Option Agreement of 10 March 2010. The Purchaser agreed to hold his interest under that Option Agreement on behalf of the plaintiff until the plaintiff exercised the option to purchase the property. 6In due course the plaintiff exercised the option to purchase the property. On 30 June 2010 the plaintiff entered into a contract with the first and second defendants to purchase the property. The purchase price was $815,000. There was no deposit. The contract provided for completion to take place on or before 3.30pm on 8 September 2010. It provided that if completion did not occur by that date, either party could serve a notice to complete making time for completion essential by giving a notice of not less than 14 days. The contract contained the following special conditions (amongst others): "35.1 The Purchaser warrants that: ... 35.1.2 it shall not make any objection, requisition or claim for compensation in relation to nor rescind terminate or delay completion of this contract because of: ... 35.1.2.2 the condition or state of repair of the property and improvements ...; 35.1.2.3 the suitability of the property or improvements for any use including, without limitation, the conduct of a business or any development whatsoever; ... 35.1.2.6 any matter disclosed by any sewerage service diagram; ... 35.1.2.8 the presence of any sewer drain manhole or vent on the property; 35.1.2.9 any rainwater downpipe being connected to the sewer; 35.1.2.10 the state of repair or condition of any service to or on the property ('service' includes air, communication, drainage, stormwater, electricity, garbage, gas, oil, radio, sewerage, telephone, television or water service); 35.1.2.11 the nature, location, availability or non-availability of any such service; ... 35.2 The Purchaser accepts the property and improvements in their present state of repair and subject to any latent or patent defects or any infestation or dilapidation. The purchaser shall not call upon the Vendor to carry out any repairs whatsoever in relation to the property, improvements and or inclusions. ... 39 Termination of Tenancy and Occupation under Licence 39.1 As at the Contract date, the Purchaser is the tenant at the property under a continuing residential tenancy agreement. 39.2 The parties agree that the continuing residential tenancy agreement will automatically terminate on the earlier of completion of [sic] termination by the Vendor of this Contract. ... 40.4 Should the Purchaser become entitled to rescind this Contract for breach of the warranty in Clause 1(d) of Schedule 3 Part 1 of the Conveyancing (Sale of Land) Regulations, the Vendor shall also be entitled to rescind this Contract provided such right is exercised before the Purchaser has served his/her notice of rescission. 41 Drainage Diagram The Vendor discloses and the Purchaser acknowledges that the drainage diagram attached to this Contract is the only drainage diagram available from Sydney Water in the normal course of administration. The Purchaser shall not make an objection, requisition, claim for compensation rescind, delay completion nor require the Vendor to do any work to the property in relation to matters disclosed or any non-disclosure in the drainage diagram." The sewerage service diagram annexed to the contract does not show the sewer connection for the property. The diagram is stamped " Unable to Gain Access to Complete Final Inspection. Property Folder Archived ". 7The plaintiff deposed that he began residing at the property around 1 March 2010. At some time two other persons, a Ms Cook and a Ms Roberts, took occupation of the property. According to the plaintiff they were in occupation as his guests. 8On 4 August 2010 the plaintiff obtained approval from HSBC Bank Australia Limited for a loan of $489,000 which the plaintiff says was the loan funds required for him to complete the purchase. In about August 2010 there was flooding on the property. The first defendant deposed that he became aware in mid-August 2010 that the rear courtyard of the property had flooded, but deposed that he was unaware of the reason for the flooding. He deposed that he was told by his plumber on 8 October 2010 that the reason for the flooding was that stormwater was going into the pipe that ran through the back of the property and connected to the sewer. He deposed that he was told by his plumber that it would cost between $2,000 and $3,000 to fix the problem. 9The plaintiff is a resident of the United States. He returned to the United States because his son was suffering a terminal illness. His son died on 14 August 2010. 10The plaintiff deposed that he was advised by several plumbers that waste water and rainwater were being routed into the sewer and that the overburden of water from the sewer caused the backing-up of the toilet, tub, and sinks which culminated in flooding of the property. He deposed that he was advised by a plumber that there were blockages of an unknown nature in the sewer. The plaintiff deposed that during August he attempted to engage the vendor in discussions about the gravity of the sewer problem. He deposed that he was advised by some civil engineers that the cost to cure the problem remained unknown until proper investigations had been carried out. He deposed that throughout August the vendor did not return his calls or reply to his letters to solve the problem. 11On 31 August 2010 the conveyancers acting for the defendants, Cove & Beaches Conveyancing, wrote to the plaintiff's solicitors, HWL Ebsworth Lawyers, and advised that the vendors were not aware of any flooding issues at the property in the past and referred to special conditions 35.1.2.2, 35.1.2.9, 35.1.2.10, 35.1.2.11, and 35.2. 12The contract provided for completion to take place by 8 September 2010. The plaintiff did not complete the purchase. It appears from the evidence of a Mr Dubery, the defendants' conveyancer, that the vendors were ready to complete. On 7 September 2010 the plaintiff's solicitor advised Mr Dubery that he was unable to obtain instructions and that the plaintiff was in mourning having suffered a bereavement and he would not be attending settlement. 13Mr Dubery deposed that on 10 September 2010 he issued a notice to complete. It appears that this notice to complete was sent to HWL Ebsworth Lawyers on that day by facsimile under cover of a letter wrongly dated 30 July 2009. It required completion to take place on 27 September 2010. 14On 27 September 2010 HWL Ebsworth wrote to Mr Dubery advising that the plaintiff had informed them that he wished to settle the purchase that week and requested an extension of time for settlement. On the same day the defendants through Mr Dubery refused that request. 15On 28 September 2010, but without having terminated the contract, the defendants commenced proceedings in the Consumer Trader and Tenancy Tribunal against Mr Douglas and the plaintiff seeking orders that they pay rent arrears of $2,400, and orders ending the " Tenancy Agreement " and taking possession of the premises due to rent arrears. That matter was listed for hearing before the Tribunal on 14 October 2010. 16Meanwhile, on 29 September 2010, Mr Dubery advised HWL Ebsworth Lawyers that the vendors would consider delaying the exercise of their alleged right to terminate the contract if the purchase were completed by 1 October 2010 with payment of all amounts said to be due in terms of the contract including interest and other necessary adjustments. Mr Dubery asked to be informed of the identity of the persons to whom the plaintiff had given occupation of the property. 17On 8 October 2010, Mr Chapman of Chapman and Chapman Solicitors, who also acted for the defendants, wrote to Mr Bluth of HWL Ebsworth Lawyers (the plaintiff's solicitor) in relation to the flooding issue. He said: "My client has been advised that there is a stormwater connection into the sewer and that the cost of rectifying this and removing the stormwater from the sewer will be between $2,000.00 to $3,000.00. I am aware that the property is an old terrace house in Woolloomooloo and that all the adjoining terraces share access to the sewer line through the rear of their respective properties without the benefit of any easement. I am aware from general conveyancing practice for old terraces in inner Sydney that this is a common occurrence. The contract and the correspondence is clear on where the liability falls for a problem such as an irregularity in the connection into the sewer line and it is my advice that the onus of the problem lies with the purchaser: My client was not aware of any plumbing irregularity until yesterday, Your client is in possession of the property and did nothing to identify the problem, the cost of rectification or raise any objection or claim for compensation under the contract, The information on the sewerage diagram is as much information as my client had in their possession, The terms of the contract make it clear that the property is sold as is and that the purchaser cannot object to an irregularity such as this." 18Mr Chapman conveyed an offer that completion take place on Wednesday, 13 October 2010 and that $4,000 be paid to the Chapman & Chapman trust account from the proceeds of sale of the property to be paid for the costs of the removal of stormwater from the connection to the sewer with the vendors to undertake that work. 19On 11 October 2010 Mr Chapman received a letter from the plaintiff in which the plaintiff asserted that what he called the " latent defect " was to be cured before transfer of title with a professional civil engineer to certify that the waste water sewer and gutter run-off issue had been properly resolved. The plaintiff disputed that the vendors would have a right to terminate the contract because he said that it was solely the vendors' actions which had made completion impossible. Other complaints were made in the plaintiff's letter in relation to the defendants having allegedly changed the locks on the premises and excluded the residents. 20The defendants through Mr Chapman denied that allegation. 21The plaintiff met the first defendant at the Consumer Trader and Tenancy Tribunal on 14 October 2010. The Tribunal dismissed the defendants' application. The first defendant deposed that the reason for dismissal was that he had failed to serve any notice on the tenant of termination of the lease and failed to request vacant possession of the property. As the contract for purchase was still on foot, the plaintiff was entitled to possession under clause 39 of the contract for sale and under clause 11 of the option deed under which the plaintiff was a Purchaser, being the assignee of Mr Douglas. According to both the first defendant and the plaintiff there was discussion between them at the Tribunal in relation to the flooding and settlement of the purchase. According to the first defendant, he told the plaintiff that he now knew that the cause of the flooding was stormwater going into the sewer lines and he had obtained an indication of price to fix the problem. He deposed that he said to the plaintiff " If I hold back money from settlement and agree to fix the problem will you settle the purchase ". He said that the plaintiff was non-committal but he told the plaintiff that he would instruct his solicitor to offer to settle the purchase on the basis that money was retained from settlement and that he agreed to carry out the work to fix the stormwater problem. He deposed that he instructed his new solicitor, Mr Chapman, to seek a new settlement date and to offer to retain money in trust in order for the settlement to take place. 22The plaintiff deposed that after the Tribunal hearing, he and the first defendant attempted to resolve their disagreements and, according to the plaintiff, they agreed that the sewer problem would cost about $50,000 to resolve. The plaintiff said that the only disagreement was whether the money should be left in a " completion account " until the sewer issue was resolved, whether the matter would be resolved before completion, or would be a deduction to the completion price. He deposed that in their discussions, the first defendant admitted that he had been aware of potential flooding and had not disclosed prior plumbing problems because he did not believe that he had to make such disclosure. The plaintiff deposed that he was shown a number of documents at the hearing evidencing the defendants' knowledge of prior flooding, but did not obtain copies of the documents at that time. The plaintiff deposed that subsequently the defendants gave discovery of an invoice from a plumber dated 22 October 2009 charging $210 for attending at the property to deal with a blocked drain and sending acid and an eel down the bath waste piping to clear the blockage. 23There is a serious question to be tried as to whether or not there was an illegal sewer connection which caused or contributed to flooding on the property, and if so, what knowledge the defendants had of that matter. There is also a serious question to be tried as to whether the adjoining owners are entitled to an easement to drain sewerage through pipes on the subject land to the sewer which has been omitted from the register. 24It does not appear from the evidence on the present application that a further offer was made by Mr Chapman on behalf of the defendants to offer to retain money in trust in order for settlement to take place. The plaintiff deposed that the first defendant refused to reduce to writing the agreement he says he made with the first defendant that $50,000 would be " left in trust with HSBC as undisbursed loan proceeds " only to be released once an engineer had given approval and had signed off on completion of the " sewer repair project ". 25On 18 October 2010 the plaintiff advised Mr Chapman that he was thereafter representing himself and was not represented by Mr Bluth of HWL Ebsworth Lawyers. 26It appears that on about 20 October 2010 the defendants offered to rescind the contract after which they would seek to retake possession of the property by giving notice to the plaintiff. The plaintiff was amenable to that proposal at that time but raised issues in relation to bond moneys, and that persons whom he described as his tenants (elsewhere called his guests) who were said to be five weeks in arrears in rent. He also raised issues in relation to his furniture and appliances in the property. Those discussions did not lead to any agreement. 27On 25 October 2010 Mr Chapman sent an email to the plaintiff advising that the first defendant was offering to rescind the contract and to assist the plaintiff in recovering any money owed to him and any furniture belonging to him. It can be inferred that Mr Chapman provided a draft deed. He said that the first defendant was offering to help as outlined in that document, but that the offer was open for that day only and if the document were not returned by that day, he had advised the first defendant to terminate the contract and retake possession. 28Mr Dubery deposed that on 26 October 2010 he sent a notice of termination of the contract to HWL Ebsworth Lawyers and to the plaintiff. According to Mr Dubery, the letter sent to the plaintiff was sent by post addressed to the plaintiff at the property in Riley Street, Woolloomooloo. At the time, the plaintiff was in the United States, as the defendants knew. The plaintiff disputes that the notice of termination addressed to him was ever sent. He admits receiving a copy of the document on 2 February 2011. 29It appears that in early November 2010 the defendants obtained vacant possession of the property. The plaintiff complains that the defendants seized his personal possessions that were on the property. The first defendant says that he had the plaintiff's consent to collect the plaintiff's furniture and to sell the furniture and that the proceeds of sale are held by Mr Chapman on trust for the plaintiff. The plaintiff disputes the validity of the defendants' purported termination of the contract and disputes their right to retake possession. 30On 22 November 2010 the defendants entered into a new tenancy agreement for the property at a rent of $850 per week. The defendants have attempted to refinance a mortgage over the property. On 3 December 2010 they obtained approval for a loan of $653,000. The first defendant deposes that it is necessary for him to refinance the mortgage on the property in order to borrow additional money to pay out an unrelated liability. The proposed loan is substantially less than the balance of the purchase price that would be payable on completion of the contract for the sale of the property if that contract is enforceable. 31The plaintiff offers the usual undertaking as to damages. However, the plaintiff is a resident of the United States and his undertaking as to damages is not secured. There is no evidence of his assets or liabilities. In his documents filed with the court the plaintiff gave as his address in California only a post office box. He gave a residential address in submissions. 32The plaintiff's purpose in purchasing the property was to renovate the property into an executive hotel with related conference facilities. 33The plaintiff is not legally represented. He has served a statement of claim alleging causes of action in breach of contract, slander of title, unlawful ejectment, conversion of personal property, the intentional infliction of emotional distress, tortious interference with business advantage, theft of trade secrets, civil conspiracy, fraud and subornation of perjury. The relief claimed is described as restoration to possession of real property, expectation damages for breach of contract of $2,000,000, an award for emotional injury, award of constructive title to real property, $75,000 damages for conversion of personal property, and $10,000,000 in exemplary damages. The statement of claim did not include a claim for specific performance of the contract, but in the course of oral submissions, the plaintiff said that that was an oversight and that the statement of claim would be amended. 34The defendants also submitted that the plaintiff had not shown that there was a serious question to be tried that he was entitled to an order for specific performance because he had not demonstrated that he was ready, willing and able to complete. However, the plaintiff adduced evidence of finance of $489,000. The plaintiff did not give specific evidence as to his other assets available to be used to pay the balance of the purchase price. However, he did depose that he was able to complete the purchase. The loan from HSBC was at the low interest rate of 2.245 per cent per annum to be secured by a first mortgage over the property. It is a reasonable inference that the lender was satisfied as to the plaintiff's ability to complete the purchase. 35The defendants also submitted that the plaintiff had not shown that there was a serious question to be tried that the contract for sale was still on foot and therefore had not shown an arguable proprietary interest that would support a caveat. The defendants contend that they were entitled to terminate the contract when the plaintiff failed to complete after time had been made essential. Whether time had become essential so as to justify termination for the plaintiff's failure to complete depends on whether the defendants were entitled to serve a notice to complete. The issue on the trial of a claim for specific performance would be whether the defendants were not themselves ready, willing and able to complete because they were not able to provide good title to the plaintiff by reason of an illegal sewer connection or an omitted easement. The proneness of the property to flooding would not preclude the valid service of a notice to complete if it were a mere defect in quality, albeit that if there had been fraudulent concealment of the defect, the purchaser might be entitled to damages or be entitled to rescind (P Butt, The Standard Contract for Sale of Land in New South Wales , 2 nd ed (1998) at [0.13]). However, if there were a defect in title, then subject to the effect of specific contractual provisions referred to below, the vendors would not have been entitled to serve the notice to complete as they would not have been able to provide a clear title. 36The defendants say that whether that is so or not is beside the point because they are entitled to rely on the special conditions quoted above by which the plaintiff accepted the property in its present state of repair and subject to any latent or patent defects and agreed that he would make no objection, requisition or claim for compensation, nor delay completion of the contract because of any matter referred to in clause 35.1.2. 37The plaintiff submits that those special conditions do not avail the defendants because they had knowledge of the flooding problem before the contract was entered into. As I have said, there is a serious question to be tried as to the nature of the problem and the extent of the defendants' knowledge. There is authority that if there is a defect in title of which the vendor is aware, a vendor cannot rely upon special conditions precluding the purchaser from taking objections in respect of such defects, unless full and frank disclosure of their existence has been made. In Beyfus v Lodge [1925] Ch 350, the consequence of non-disclosure was only to preclude the vendor from obtaining specific performance. In other cases it has been held that contractual terms precluding a purchaser from objecting to defects in title are to be taken as applying only to those defects of which the vendor did not have knowledge ( Nottingham Patent Brick and Tile Company v Butler (1885) 15 QBD 261 at 271; (1886) 16 QBD 778 at 786, 789, 790; A K Turner & R J Sutton, Actionable Non-Disclosure , 2 nd ed (1990) at [7.15]). In Rignall Developments Limited v Halil [1988] Ch 190, Millett J (as his Lordship then was) held that it was a well-established rule of equity that a vendor could not rely upon such conditions unless full and frank disclosure was made of the existence of the defect (at 197). His Lordship held that a defect of title of which the vendor was aware precluded service of a valid notice to complete, notwithstanding conditions in the contract by which the purchaser was deemed to have knowledge of all matters that would be disclosed by search. 38Section 38 of the Sydney Water Act 1994 empowers Sydney Water Corporation to enter and occupy land for any of the purposes specified in the section. Those purposes include ascertaining whether a customer contract is being breached in relation to the connection to or use of works. For that purpose the corporation is empowered to dig up and remove material from the land (s 38(1)(e)). An owner of land is taken to have entered into a customer contract with the corporation on the terms and conditions set out in the relevant operating licence for the provision of water supply or sewerage services to the land (s 55(1)). According to the learned authors of CCH, New South Wales Conveyancing Law Commentary (at [6-310]), clause 8.5 of that contract states that if Sydney Water becomes aware of any defective or unauthorised work to a landowner's water system or sewer system or stormwater drainage service, Sydney Water may serve notice requiring the defect to be remedied, in default of which Sydney Water may undertake the remedying of the defective or unauthorised work. There is no evidence that any such notice has been given in this case, but there is a serious question to be tried as to whether or not Sydney Water would be entitled to exercise its powers under s 38 in relation to the property by reason of an unauthorised connection. 39However, the mere possibility that Sydney Water may exercise a statutory power to enter and do work on the property would not be a defect in title. In Carpenter v McGrath (1996) 40 NSWLR 39, the Court of Appeal held that the existence of unauthorised improvements on land was not a defect in title, notwithstanding that the local council had the power to order demolition. The position would be different had notice been given of intended exercise of the power. By parity of reasoning an unauthorised sewer connection would not be a defect in title if Sydney Water Corporation had not given any notice for the exercise of its statutory powers to enter and do work on the land, even if it were entitled to do so. 40Professor Butt states that where a service for another property passes through the subject property, this will constitute a defect in title wherever a statutory authority supplying or administering the service has a statutory right to enter the subject property to construct, maintain or inspect the service ( The Standard Contract for Sale of Land in New South Wales , 2 nd ed (1998) at [10.36]). However, in this case the defect about which the plaintiff complains is not the presence of Sydney Water Corporation's sewer on the property, but either an illegal connection to the sewer or a physical blockage in the pipes or sewers, or both. Neither would be a defect in title, unless Sydney Water Corporation had given notice of an intended exercise of power to enter the land. There is no evidence that it had done so. 41General condition 7 of the contract as amended by special condition 30.3 provides that the purchaser could make a claim before completion only by serving the vendors with a statement of the amount claimed. If the purchaser made a claim before completion, the vendors could rescind if the total amount of the claim exceeded one dollar, the vendors served notice of intention to rescind, and the purchaser did not serve notice waiving the claim within 14 days after that service. The plaintiff did not make a claim in writing for the cost of rectifying the connection to the sewer. 42The presence of the Corporation's sewer on the land or an undisclosed easement would be a defect in title, but special conditions 35.1.2.6 and 41 preclude objection being taken. There is no evidence that the defendants had any further knowledge of the location of the sewer or of any easement beyond what was disclosed in the contract. 43The only warranty prescribed by the Conveyancing (Sale of Land) Regulation 2010 that might arguably apply is the warranty in cl 1(d) of Pt 1 of Sch 3 that there is no matter in relation to any structure on the land included in the sale that would justify the making of an order No. 12 in the Table to s 121B of the Environmental Planning and Assessment Act 1979. Order No 12 permits the making of an order requiring, inter alia , the owner of premises to do specified things to restore premises to the condition in which they were before work was unlawfully carried out. 44But although the purchaser would be entitled to rescind for breach of that warranty ( Conveyancing Act 1919, s 52A(7)), such a breach would not mean that the vendors were not able to proceed to completion at the time they served the notice to complete, where the purchaser had not made a claim, nor sought rescission. The plaintiff does not seek to rescind the contract. 45I do not consider that there is a serious question to be tried that the defendants were not entitled to terminate the contract. While the plaintiff disputed that the defendants' conveyancer had served the notice of termination, it is clear that he became aware that the defendants asserted they had terminated the contract. He does not point to any conduct of the defendants whereby they might arguably have affirmed the contract. 46The plaintiff argued in the alternative that he was entitled to maintain the caveat in order to protect what he asserted to be his tenancy of the property. He complained that the defendants had acted illegally by obtaining vacant possession of the property without an order from the Court or the Consumer Trader and Tenancy Tribunal. He referred to s 68 of the Landlord and Tenant (Amendment) Act 1948 and submitted that because the Tribunal had refused to make an order for possession at the suit of the defendants, the defendants were not entitled to give a notice to quit within 12 months of that decision. 47Section 68 of the Landlord and Tenant (Amendment) Act provides: "68 Notice to quit after failure of eviction proceedings (1) Where a lessor has taken proceedings in any court to recover possession of any prescribed premises from the lessee and the court has (whether before or after the commencement of this Act) refused to make an order in favour of the lessor, the lessor shall not give to the lessee any notice to quit (whether on the same ground as a previous notice to quit or on some other ground) within twelve months after the decision of the court unless he or she has first obtained the leave of a court having jurisdiction under this Part so to do. (2) Where a court refuses to make an order in favour of a lessor it may, at the same time, grant leave for the purposes of this section." 48There was no evidence that Pt 3 of the Landlord and Tenant (Amendment) Act (in which s 68 is included) applies to the property in question (see s 5AA). In any event, the proceedings in the Tribunal were not proceedings in a court to which s 68 applies. 49No evidence was given of any residential tenancy agreement to which the plaintiff was a party. Prima facie , the Residential Tenancies Act 2010 did not apply as the plaintiff's right to occupation arises from an agreement for the sale of land (s 8(1)(f)). 50It is irrelevant to the application to extend the operation of the caveat whether or not the defendants acted lawfully in retaking possession of the property. The caveat does not claim an interest as tenant. If the contract of sale were validly terminated, the plaintiff would have no further title to occupy the premises, even if s 2AA of the Landlord and Tenant Act 1899 required the defendants to obtain a court order for his eviction. The premises have been re-let. 51As to the balance of convenience, the defendants did not say that they wished to sell the property to a third party. Their desire is to be able to refinance existing loans by mortgaging the property. The amount they propose to raise by way of loan is substantially less than the balance of the purchase price that would be payable if the plaintiff were to succeed in an action for specific performance. There is no evidence of any hardship to the plaintiff if the defendants were able to deal with the property as they propose. If the plaintiff succeeded in his claim for specific performance, the defendants would be required to discharge the mortgage, but they would have the funds to do so from the balance of the purchase price. At the moment the caveat prohibits the registration of any dealing including a mortgage. Even if the plaintiff is entitled to enforce the contract for sale, he would not be entitled to restrain the defendants from refinancing on security of the property, provided that the defendants did not put it out of their power to convey an unencumbered title to him on tender of the purchase price. 52Accordingly, even if there were a serious question to be tried that the defendants were not entitled to terminate the contract, the caveat should not be permitted to remain so as to prohibit the dealing the defendants propose. 53An additional reason for not permitting the caveat to remain is that the plaintiff's undertaking as to damages would be very difficult to enforce and has not been shown to be of value. 54For these reasons I order that the order made on 2 March 2011 extending the operation of caveat AF470369V be discharged. This order may be entered forthwith. 55I direct that the plaintiff file and serve a further amended statement of claim by 29 April 2011, and that the defendants file and serve a defence to that statement of claim by 20 May 2011. I stand the proceedings over to the Registrar's list on 25 May 2011. I order that the plaintiff pay the defendants' costs of the application to extend the operation of the caveat.