For the reasons that follow, I conclude firstly that the underlying interest asserted by Reliance as supporting the caveat is particularly weak. That is, Reliance does not have an arguable case for the purposes of the applicable test in Symmons Plains and AAGG to resist an order that the caveat be removed. Secondly, I conclude that the balance of convenience clearly favours removal of the caveat and the priority notices.
In my view, Udiminia appears to have an overwhelming case that the redemption of the mortgage is a matter which has been agreed as between the mortgagor and the mortgagee. Udiminia and APMF have entered into a deed of redemption of the mortgage, which acknowledges the mortgage, the right of redemption, the fact that the matters required to amount to redemption have, or will imminently be, performed. The caveat which is the subject of the present proceedings is contemplated in the deed, effectively acknowledging that it is an obstacle as submitted by Udiminia (referred to as 'the Reliance Caveat').
Further, annexed to Mr McCullagh's affidavit is a notice of rescission of contract of sale, which appears to have been provided by APMF to Reliance as contemplated by the contract of sale and the deed of redemption. That notice of rescission is purportedly issued under the contract of sale. The evidence before me indicates that notice was communicated by APMF, via its lawyers to the lawyers for Reliance, on 29 October 2025 at 4.41pm. I do not understand there to be any dispute about that fact.
Whether or not the notice of recission is strictly given in accordance with the contract of sale, does not appear to be the correct question before me. What is relevant is whether it appears, for the purposes of evaluating the strengths and weaknesses of the caveator's underlying interest, that the condition for the rescission of the contract of sale exists: the redemption of the mortgage. The evidence that the mortgage has been - or is to be - redeemed appears to be overwhelming. There is no reason to reject the assertions that the redemption monies are in the mortgagee's trust account, awaiting release. Indeed, that does not appear to be really in dispute. It appears to be clear that Udiminia's new financier has placed those funds in the trust account of the same law firm as acts for APMF. The deed and the notice of rescission add significantly to the picture. Whether the formalities relating to the rescission are compliant with the contract of sale or not does not, in these particular circumstances, seem to have enormous significance. The fact that the mortgage either has been or is to be redeemed is a conclusion which can be safely reached on material before me. That leads to a conclusion that Reliance's underlying interest is weak.
Counsel for Reliance submits that redemption has not occurred. That may be so - but that is not a determination I am required to make. Reliance submits that the Court should not be satisfied that the deed of redemption contemplates payment of the full amount of Udiminia's indebtedness to APMF under the mortgage. He submits that the Court should assume that the terms of the mortgage will state that payment is not to be regarded as having been made until it has been credited to the mortgagee's account. Reliance submits (in effect) that the mortgagee's right to rescind the contract arises only after redemption has occurred in those circumstances and the Court should not assume that has, can or will occur. As to the further arguments about whether the redemption does, or does not, conform to the terms of the mortgage, Reliance is not a party to the mortgage; and APMF is not a party to these proceedings.
I am unable to apprehend that the redemption has not occurred - or might not occur - in conformity with whatever formalities the mortgage requires. That is strictly a matter between Udiminia and APMF. However, on the evaluation of the comparative strengths and weaknesses of Reliance's position, it is very difficult to look beyond the deed as evidence that the mortgagee and the mortgagor have agreed that redemption will occur and that there are funds available for that to happen.
The next issue is to assess the strength of the contention that the caveat prevents the parties dealing with the properties, as contemplated by the mortgage, the deed of redemption and as provided for in the sale agreement. It seems fairly safe to assume that Bacena, as the incoming mortgagor, will not authorise the money to be released to APMF for the purpose of redeeming the mortgage unless it can secure its loan. It cannot secure its loan unless the caveat is removed. That proposition does not appear to be controversial. The caveat presently secures Reliance's interest in the contract of sale, which, for the purposes of evaluating the strengths and weaknesses of Reliance's interest secured by the caveat, appears very weak indeed. It appears to be inevitable that the contract of sale has been rescinded, or will be rescinded, because of the performance of the deed of redemption.
Udiminia submitted at paragraph 46 of its written outline that:
[2]
"The balance of convenience clearly favours removal of the caveat. Reliance's purported caveatable interest is so weak to warrant removal. [Udiminia's] registration as proprietor and its right of redemption trump any purported claim by Reliance. Even if it has such a claim, the removal of the caveat, the payment of the funds and the reissuing of the notice of rescission will meet Reliance's complaints. [Udiminia] is also at risk of ongoing variation fees and the risk the funds could be withdrawn and the DoR not completed for want of the new financier being about to register its mortgage. In that event, [Udiminia] will need to reorganise its finances to again attempt to comply with the [deed of redemption ]. Reliance's caveat will remain an obstacle.
[3]
As stated above, I accept that each of the parties bear very significant financial burdens in relation to their respective financial facilities. However, that matter is not particularly relevant on the evaluative exercise as contemplated by the legal test. I conclude that the caveat is unjustifiably interfering with Udiminia's right to redeem the mortgage and APMF's right to rescind the contract of sale.
I conclude that Reliance does not have a prima facie case for the retention of the caveat or, putting it another way, there is no serious question to be tried in relation to the underlying interest.
I propose to make orders in accordance with 1-4, 6 and 8 of the originating application. I will hear the parties further as to that.
Udiminia Developments Ulverstone Pty Ltd v Reliance Developments Devonport Pty Ltd & Anor [2025] TASSC 62 (7 November 2025)
In Symmons Plains Pastoral Holdings Pty Ltd v Youl[2005] TASSC 35 at [7], Blow J (as he then was) stated:
"[7] There is a strong body of authority supporting the proposition that a statutory discretion to order the removal of a caveat should be exercised in accordance with the 'balance of convenience' test that is applied in relation to interlocutory injunctions: Eng Mee Yong v Letchumanan[1979] UKPC 13; [1980] AC 331; Re Burman's Caveat[1993] QCA 252; [1994] 1 Qd R 123; Lindsay Caveats Against Dealings in Australia and New Zealand, 206 - 211; Colbran and Jackson Caveats, 346 - 354. In applying that test in the context of a summary application for the removal of a caveat, it is not appropriate to determine factual issues that are in dispute between the parties. However, it is appropriate to assess the strengths and weaknesses of the parties' cases."
Re Burman's Caveat reaffirmed the principle in Re Jorss' Caveat[1982] Qd R 458 that the position of a caveator should be considered equivalent to that of an applicant for an interlocutory injunction, to the effect that when deciding whether to remove a caveat, the court should apply the same test as for interlocutory injunctions: (i) is there a serious question to be tried; and (ii) does the balance of convenience favour maintaining or removing the caveat?
The case of AAGG Developments Pty Ltd v Saafin Constructions Pty Ltd[2020] VSC 768 also contains a useful statement of legal principle at pars [8]-[9] as follows (footnotes omitted):
An application to remove a caveat involves two steps. First, the Caveator must establish that there is a prima facie case - there is a probability on the evidence before the Court that the Caveator will be found to have the asserted legal or equitable rights or interest in the land. Second, having done so, the Caveator must establish that the balance of convenience favours the maintenance of the Caveat on the title until trial and that probability is sufficient to justify the practical effect which the caveat has on the ability of the registered proprietor to deal with the property in question in accordance with their normal proprietary rights." (footnotes omitted)
In Hansen Construction Materials Pty Ltd v Roberts[2016] NSWCA 240; (2016) 93 NSWLR 1, it was held that the caveator bears the onus of showing that there is a 'serious issue to be tried' as to the existence of the interest claimed in the caveat. Once the caveator discharges that onus, the continuation or removal of the caveat depends upon the court's assessment of the balance of convenience. Further, the authorities recognised the strengths of the caveator's claim to an interest in land is significant in assessing the balance of convenience. The apparent strength of a party's case is a material factor in assessing the balance of convenience.
In light of Derham AsJ's observations in AAGG Developments, above, it is worth repeating that this particular case is not an interlocutory application.
A court of equity may refuse to make orders requiring the mortgagee to provide a discharge in circumstances of equitable wrongdoing by the mortgagor (Mijac Investments v Graham (No 2) [2009] FCA 773). This includes:
delay;
paying a bribe; or
a scam to deprive the ATO of tax - paying a CEO with a capital asset.