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Catchwords: LAND LAW — Caveats — Extension of operation of caveat — Balance of convenience — Defendants joint proprietors of two properties — Plaintiff purports to have interest in properties pursuant to brokerage agreements — Plaintiff lodged three caveats to secure sums it says are owed to it in February and March 2026 — Defendants seek to refinance properties — Lapsing notice of caveats lodged in August 2026 — Defendants concede there is a serious question to be tried — Whether balance of convenience favours extension of the operation of the caveats — Where plaintiff’s purported interest is relatively small compared to value of equity in property — Plaintiff submits removal of caveats would derogate from their interest — Plaintiff submits they require alternative security — Defendants say caveats are preventing refinancing — Defendant say relative strength of plaintiff’s case is low
LAND LAW — Caveats — Suitable alternatives to extension of caveats — Whether plaintiff should be permitted to lodge a further caveat pursuant to s 74O of the Real Property Act

Legislation Cited: Real Property Act 1900 (NSW) ss 74J, 74J, 74MA, 74O
Civil Procedure Act 2005 (NSW) s 98(1)
Uniform Civil Procedure Rules 2005 (NSW) rr 42.1, 42.7

Cases Cited: Andrews v Wilcox [2008] NSWSC 280
Bride v Registrar of Titles [2015] WASC 11
Buchanan v Crown & Gleeson Business Finance Pty Ltd [2006] NSWSC 1465; (2006) 13 BPR 24,513; (2007) NSW ConvR 56-173
Capital Securities XVII Pty Ltd v Anna’s Garden Pty Ltd [2019] NSWSC 1256
Darlinghurst Public School Parents and Citizens Association v Department of Education [2026] NSWSC 780
Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373
Finlayson v Bagala [2024] NSWSC 94
Kyriacou v Raphis Securities Pty Ltd (No 2) [2022] NSWSC 339
Marginata Securities Pty Limited (Provisional Liquidators Appointed) v Kiah 1 Pty Limited [2026] NSWSC 864
Marinkovic v Pat McGrath Engineering Pty Ltd [2004] NSWSC 571
Netdeen Pty Ltd t/as GJ Gardner Homes v Lindfield NSW Pty Ltd (No 2) [2025] NSWCA 218
State of New South Wales v Stanley [2007] NSWCA 330
Tsakirios v State of New South Wales [2026] NSWCA 132
Yu v Cao (2015) 91 NSWLR 190; [2015] NSWCA 276

Category: Procedural rulings

Parties: W.E Finance Group Pty Ltd (Plaintiff)
Vivian Sinatambou (First Defendant)
Dawn Mary Anne Sinatambou (Second Defendant)

Representation: Counsel:
R Cavanagh (Plaintiff)
B Farhan (Defendants)
Solicitors:
MARS Legal (Plaintiff)
Du Lawyers (Defendants)

File Number(s): 2026/00372243

Publication restriction: N/A

JUDGMENT

Introduction

1. This judgment relates to an application for caveat extensions made by W.E Finance Group Pty Ltd (W.E Finance or the plaintiff) that I heard as Duty Judge on Wednesday, 30 September 2026. The plaintiff is a company through which mortgage brokering services are provided. The first defendant is Vivian Sinatambou, and the second defendant is his wife Dawn Mary Anne Sinatambou (together, the defendants).

2. The plaintiff purports to have an interest in two properties of which the defendants are joint proprietors pursuant to three brokerage agreements executed in 2025 and 2026. To secure the sums it says are owed to it by the defendants, the plaintiff lodged the three caveats between 19 February 2026 and 16 March 2026. Broadly put, the plaintiff’s interlocutory application is to extend the operation of three caveats lodged against those two properties.

Hearing details

3. The matter was referred from the Registrar in Equity to me as the Equity Duty Judge on Wednesday, 30 September 2026.

4. Ms R Cavanagh of counsel appeared for the plaintiff and provided written submissions dated 8 September 2026 (PWS1). Ms Cavanagh also provided supplementary written submissions dated 29 September 2026 (PWS2).

5. Mr E B Farhan of counsel appeared for the defendants and provided written submissions dated 29 September 2026 (DWS).

6. Noting this took place in the context of a busy Duty List, I reserved my decision, however have sought to provide my decision as expeditiously as possible, and without the benefit of the transcript. For this reason, in the interests of expedition, I will endeavour to keep these reasons as brief as possible.

7. In setting out my reasons below, I have not referred to every piece of evidence nor every argument made by the parties, all of which I have had regard to. The references to the evidence and submissions below are sufficient to explain my reasons for reaching the decision I have on each of the issues in dispute in these proceedings (Tsakirios v State of New South Wales [2026] NSWCA 132 at [162]-[166]).

8. At the commencement of the hearing, I noted my concern to the parties that the application I was about to hear concerned caveats that were to lapse later that same day. It was in this context that the parties agreed to the Court making orders by Consent extending the operation of the caveats until further order, with the effect that the caveats would continue (at least) until the publishing of these reasons.

Relief claimed, including Final Relief

9. By Summons filed in Court on 8 September 2026, W.E Finance seeks, in substance and relevantly to these reasons:

Interim relief

1. An order pursuant to s 74K(2) of the Real Property Act 1900 (NSW) extending the operation of the following three Caveats until further order:

(a) X, lodged against the X X Street, Caringbah South NSW 2229, being the land comprising folio identifier X/X (Caringbah South property); (b) X, lodged against X X Street, Surry Hills, being the land comprising folio identifier X/X (Surry Hills property); and (c) X, lodged against both the Caringbah South property and Surry Hills property (together, the Properties); or

2. Alternatively, an order pursuant to s 74O of the Real Property Act granting leave to the plaintiff for the lodgement of a fresh caveat properly describing the plaintiff’s interest against the Properties.

Final relief

3. Declarations that the plaintiff holds equitable charges over the Properties, securing fees owed by the defendants to the plaintiff, pursuant to brokerage agreements entered into by the parties; and

4. Appointment of a receiver for the purpose of selling the Properties and disbursing the proceeds of those sales.

5. In relation to the Final relief sought, in the course of the hearing the plaintiff indicated that it proposed to commence proceedings in the District Court of New South Wales in relation to the subject matter of these proceedings.

6. During the hearing, the plaintiff clarified its position in relation to the alternative order sought pursuant to s 74O of the Real Property Act (s 74O order). The plaintiff expressed this order was included in the Summons only for the event that the matter might be heard after the Caveats had lapsed, but as they had not yet lapsed, submitted a s 74O order would not be a suitable form of interim relief. The s 74O order was listed as an alternative sought order in both PWS1 and PWS2.

7. The plaintiff confirmed that it offered the usual undertaking as to damages (PWS1 [39]).

8. The defendants sought to lapse the Caveats so as they may refinance the properties and relieve various financial pressures. On 18 August 2026, the defendants by their solicitors served a lapsing notice in relation to each caveat on the plaintiff. That notice was received by the plaintiff on 20 August 2026 (PWS1 [17]-[18]). Pursuant to s 74J of the Real Property Act and orders extending the caveats made by Slattery J on 9 September 2026, those caveats were to lapse on 30 September 2026.

9. During the hearing, and in their written submissions, the defendants opposed the plaintiff’s application for the extension of the Caveats, and sought the following orders, which also included case management orders in relation to the substantive proceedings:

10. The Court:

(a) orders that the Caveats be discharged pursuant to s 74MA of the Real Property Act; (b) notes the defendants’ undertaking, until the conclusion of the matter or further order of the Court:

(i) not to transfer, dispose of, encumber or otherwise deal with the Properties other than in respect of the proposed refinancing; (ii) not to increase or seek to increase the amount drawn upon the Properties in the proposed refinancing; (iii) to promptly pay monthly interest due from time to time on existing mortgages over the Properties or the proposed refinancing and not otherwise permit a mortgage in respect of the Properties to go into default, such that default interest might be charged.

2. Alternatively, the Court:

(a) orders that the plaintiff withdraw the Caveats; (b) grants leave to the plaintiff pursuant to s 74O of the Real Property Act to lodge further caveats with respect to the same interests in the Properties as claimed in the Caveats, either immediately after registration of the discharge of mortgage number AV507363 and registration of a new mortgage, or 56 days from the date of withdrawal of the Caveats, whichever occurs first.

3. Order the plaintiff file and serve a statement of claim setting out its claim for relief articulating the claim in the Caveats by 28 October 2026.

4. Order the proceedings be stood over for directions before the Real Property List Judge on 30 October 2026.

5. Order that costs of and incidental to the present application be paid by the plaintiff as agreed or assessed.

6. Liberty to apply on 3 days’ notice.

7. Notwithstanding the reference by the defendants to s 74MA of the Real Property Act, the parties in the course of the hearing clarified that it was common ground that the issue before the Court was in relation to s 74K and whether the Court should exercise its discretion and extend the operation of the Caveats, without which their operation would otherwise lapse give the lapsing notice referred to at [13].

Summary of conclusion

16. For the reasons set out below, I do not propose to extend the Caveats as sought by the plaintiff. However, I do propose to make an order pursuant to s 74O of the Real Property Act, in the terms set out in the Orders at [93] below.

Evidence

17. The plaintiff read and relied upon three affidavits:

18. Affidavit of Wafa Elmol affirmed 9 September 2026 (the plaintiff also tendered Exhibit WE-1 to that affidavit);

19. Affidavit of Mona Hentze dated 9 September 2026; and

20. Supplementary affidavit of Wafa Elmol affirmed 28 September 2026.

21. Ms Elmol is a director of the plaintiff, W.E Finance.

22. The defendants read and relied upon two affidavits of the first defendant, sworn 21 September 2026 and 29 September 2026.

Relevant background facts

20. In setting out the relevant background facts, for ease of reference I will predominantly refer to various events in the terms set out in PWS1, PWS2, and DWS, noting however that I was taken to a number of the primary documents in the evidence in the course of the hearing and I have otherwise reviewed and considered the primary evidence.

Terms of Engagement

21. In or around late 2025, the defendants approached Ms Elmol seeking assistance to secure refinancing in respect of the Properties (PWS1 [6]; DWS [7]).

22. Between October 2025 and January 2026, the plaintiff and defendants executed three documents, each titled “Terms of Engagement” (PWS1 [7]; DWS [8]), being:

23. First Terms of Engagement, signed 22 October 2025, seeking a loan of $3,500,000 secured against the Caringbah South property;

24. Second Terms of Engagement, signed 10 December 2025, seeking a loan of $2,880,000 secured against the Surry Hills property; and

25. Final Terms of Engagement, signed 9 January 2026, seeking a loan of $6,200,000 secured against the Properties.

26. Each Terms of Engagement document (the engagement****s) was drafted in identical terms, save for the percentage of the relevant loan amount to be charged as a professional fee (see [25]). To provide an example of the terms of all three engagements, counsel for the defendants took me to the First Terms of Engagement. Relevantly for present purposes, clauses four and five provide (PWS1 [12]-[13]):

(4) that the defendants charge and mortgage their interest in the relevant land, and all other property, to secure the payment of fees, and that the plaintiff is entitled to enforce that charge notwithstanding that the loan does not proceed for any reason; and

(5) that the defendants consent to the plaintiff’s lodging and maintaining a caveat or caveats against the land charged under clause 4.

Fees arising from the Terms of Engagement

24. None of the engagements resulted in the defendants obtaining a loan (PWS1 [14]; DWS [10]).

25. The plaintiff claims it is owed $255,860.00 in fees for brokerage services (PWS1 [34]). That figure is calculated as follows (PWS1 [10]):

“a. Clause 1 of the First Terms of Engagement provides for a total fee comprising of a $2,200.00 application fee, inclusive of GST, and a professional fee of 2.2% of the $3,500,000.00 loan amount.

b. Clause 1 of the Second Terms of Engagement provides for a total fee comprising of a $5,500.00 application fee, inclusive of GST, and a professional fee of 2.2% of the $2,880,000.00 loan amount.

c. Clause 1 of the Second Terms of Engagement provides for a total fee comprising of a $5,500.00 application fee, inclusive of GST, and a professional fee of 1.5% of the $6,200,000.00 loan amount, plus GST on that professional fee.”

26. The plaintiff submitted those fees have not been paid by the defendants (PWS1 [15]). This was not disputed by the defendants.

Caveats

27. As noted earlier in this judgment, to secure the sum it says is owed to it by the defendants, the plaintiff lodged the Caveats between 19 February 2026 and 16 March 2026 (PWS1 [16]). It was common ground that the nature of the plaintiff’s interest in the properties, as arising from the engagements and protected by those Caveats, was that of an equitable charge, as acknowledged by the defendants in the course of the hearing (PWS1 [30]).

28. On 18 August 2026, the defendants by their solicitors served a lapsing notice in relation to each caveat on the plaintiff.

Legal Principles

Section 74K

29. I have recently set out the statutory framework and legal principles to be applied in applications for an extension of a caveat in Marginata Securities Pty Limited (Provisional Liquidators Appointed) v Kiah 1 Pty Limited [2026] NSWSC 864 at [61]-[65]:

“[61] Section 74K of the Real Property Act 1900 (NSW) relevantly provides (emphasis added):

74K Power of Supreme Court to extend operation of a caveat lodged under section 74F

…

(2) Subject to subsection (3), on the hearing of an application made under subsection (1), the Supreme Court may, if satisfied that the caveator’s claim has or may have substance, make an order extending the operation of the caveat concerned for such period as is specified in the order or until the further order of that Court, or may make such other orders as it thinks fit, but, if that Court is not so satisfied, it shall dismiss the application.

[62] There was no dispute as to the relevant principles to be applied on this application. They are as identified by Brereton J in Sutherland v Vale [2008] NSWSC 759 at [11], and more recently applied and distilled by Brereton J in Khaihra v Agarwal [2025] NSWSC 1276 at [4], the latter of which I will set out below:

[4] … In short, the test to be applied on an application to extend the operation of a caveat under s 74K of the Real Property Act 1900 (NSW) is the test for the granting of an interlocutory injunction. Two issues must be addressed. First, whether the caveat has or may have substance, which encompasses the concept of a seriously arguable case. The second is the balance of convenience.

[63] On the broader issues to be considered, recently the Court in Darlinghurst Public School Parents and Citizens Association v Department of Education [2026] NSWSC 780 (Darlinghurst) (McGrath J) stated at [62]-[67]:

[62] The task of a court determining whether to exercise the power to grant an interlocutory injunction is to do so in a manner which achieves justice between the parties pending the final hearing of the proceedings.

[63] This was expressed in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63, Gleeson CJ at [12] stating:

17 … The justice and convenience of imposing interim restraint, pending the hearing of the final action, if it exists, lies in the need to prevent the practical destruction of that right before there has been an opportunity to have its existence finally established.

[64] The principal inquiries to be made in deciding whether to grant an interlocutory injunction have been expressed in slightly different terms, but to the same effect.

[65] In Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; [1986] HCA 58, Mason ACJ at [11] said:

18 … In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.

[66] In Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46, Gleeson CJ and Crennan J at [19], after repeating these inquiries, described them as:

19 … the organising principles, to be applied having regard to the nature and circumstances of the case, under which issues of justice and convenience are addressed. …

[67] In O’Neill, Gummow and Hayne JJ (with whose reasoning Gleeson CJ and Crennan J agreed: see [19]) at [65] expressed the first inquiry in this manner (footnotes omitted):

20 The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:

21 The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.

22 By using the phrase “prima facie case”, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring [sic] to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:

23 How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.

[64] In these interlocutory proceedings, the defendant has conceded that there is a “serious question to be tried” concerning the Final Relief sought (DWS [1](a)), and thus there is no dispute that the plaintiff’s caveat involves a “seriously arguable case” or that the plaintiff’s claim “has or may have substance”. Accordingly, the focus of submissions, in writing and orally, was on the balance of convenience.

[65] In referring to the relevant legal principles to be applied, in DWS the defendant sought to raise for the Court’s consideration two particular issues the Court ought to take into account (DWS [12]-[13]):

12. On an application concerning a caveat, the Court asks whether the caveator would be granted an interlocutory injunction to protect the interest claimed — that is, whether there is a serious question to be tried as to the existence of the interest referred to in the Caveat, and whether the balance of convenience favours protection of the alleged interest: Bayblu Holdings Pty Ltd v Capital Finance Australia Ltd (2011) 15 BPR 29,055 at [20]; Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222; Martyn v Glennan [1979] 2 NSWLR 234.

13. Two matters to take into account include:

(a) First, generally an interlocutory injunction is granted only upon the applicant giving the usual undertaking as to damages, which is the normal concomitant of such relief: UCPR r 25.8; Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249. Where no undertaking of value is proffered, and no security is offered, that is a compelling reason to refuse the relief, including refusing to extend a caveat: 2-6 First Ave Pty Ltd v Aquamore Credit Equity Pty Ltd [2018] NSWSC 980 at [28] and [31]; Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1990) 21 NSWLR 459 at 478; Australian Spirit Management Pty Ltd v Commissioner of Taxation [2011] NSWSC 1626 at [45].

(b) Second, the apparent strength of the claim is material to the balance of convenience and cuts both ways: Hanson Construction Materials Pty Ltd v Roberts (2016) 93 NSWLR 1; [2016] NSWCA 240 at [77], [79] and [82].”

Balance of convenience

30. In relation to the issue of the Court’s consideration of the balance of convenience, in Darlinghurst, McGrath J (at [68]-[74]) set out the following principles, which I gratefully adopt:

“[68] The inquiry involving the balance of convenience is determined by whether the inconvenience or injury the plaintiff is likely to suffer if an injunction were refused outweighs, or is outweighed by, the injury the defendant is likely to suffer if an injunction were granted: Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1, Kitto, Taylor, Menzies and Owen JJ at 622–623. The plaintiff bears the onus of establishing that the balance of convenience lies in favour of granting the interlocutory injunction: O’Neill, Gummow and Hayne JJ at [65], [71].

[69] While the factors to be taken into account in determining where the balance of convenience lies will vary with the circumstances of each case, they most often include the strength of the plaintiff’s case, the hardship to the parties and third parties, delay, the utility of the proposed orders and the sufficiency of the plaintiff’s undertaking as to damages.

[70] The strength of the party’s case for final relief is an important consideration in determining where the balance of convenience lies, there being a connection between the inquiry about the serious question to be tried and the balance of convenience. In Warner-Lambert Company LLC v Apotex Pty Ltd (2014) 106 IPR 218; [2014] FCAFC 59, Allsop CJ, Jagot and Nicholas JJ at [70] said:

Whether an applicant for an interlocutory injunction has made out a prima facie case and whether the balance of convenience favours the grant of such relief are related questions. It will often be necessary to give close attention to the strength of a party’s case when assessing the risk of doing an injustice to either party by the granting or withholding of interlocutory relief especially if the outcome of the interlocutory application is likely to have the practical effect of determining the substance of the matter in issue or if other remedies, including an award of damages, or an award of compensation pursuant to the usual undertaking, are likely to be inadequate.

[71] The stronger the prima facie case for final relief and therefore the likelihood of success, the less is needed for the balance of convenience in favour of the grant of the interlocutory injunction: BMW Australia Ltd v Brewster (2019) 269 CLR 574; [2019] HCA 45, Edelman J at [216].

[72] The hardship to the parties, and the nature of that hardship, is a central feature in the discretionary considerations to be addressed in the balance of convenience. It requires the court to assess the harm to the plaintiff if there is no injunction and the prejudice or harm to the defendant if the injunction is granted: Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238; [2011] FCAFC 156, Dowsett, Foster and Yates JJ at [62]. The question of whether damages would be an adequate remedy for the plaintiff must always be considered as part of this inquiry, which “involves an assessment by the court as to whether the plaintiff would, in all material respects, be in as good a position if he were confined to his damages remedy, as he would be in if an injunction were granted”: Samsung at [62].

[73] The interests of third parties are also relevant to the balance of convenience, including any disadvantage or hardship caused to them if an injunction were refused, and whilst the weight of those matters depends on the circumstances of the case, they will rarely be decisive: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1; [1998] HCA 30, Brennan CJ and McHugh, Gummow, Kirby and Hayne JJ at [65]–[66].

[74] The giving of an undertaking as to damages by the plaintiff is an essential condition to the grant of an interlocutory injunction, unless there are exceptional circumstances: First Netcom Pty Ltd v Telstra Corp Ltd (2000) 101 FCR 77; [2000] FCA 1269, Beaumont, Burchett and Emmett JJ at [22]; Goater v Commonwealth Bank of Australia [2014] NSWCA 265, Ward JA at [92]. If it is demonstrated that the plaintiff has no assets, the undertaking offered may be of no assistance, although there is no inflexible rule that the plaintiff should be denied interlocutory relief if a meaningful undertaking cannot be given: Organic Marketing Australia Pty Ltd v Woolworths Ltd [2011] FCA 279, Katzmann J at [69], citing Caravelle Investments Ltd v Martaban Ltd (1999) 95 FCR 85; [1999] FCA 1505, Finkelstein J at [25]. If it is known that a plaintiff does not have sufficient resources to satisfy an undertaking as to damages, that may provide a basis on which to refuse an interlocutory injunction: Bond v Gray [2013] NSWSC 1793, Lindsay J at [29]–[30].”

Parties’ submissions

31. Each of the parties made submissions regarding the legal principles to be applied in relation to an application for the extension of a caveat, which were broadly in conformity with the legal principles set out above (PWS1 [23]-[29], PWS2 [11], DWS [11]-[18]). However, each party highlighted particular aspects of the law in relation to their respective contentions.

32. The plaintiff, for example, made the following submissions in relation to the relevance of the fact that the interest which was sought to be protected was an equitable charge (PWS1 [26]-[28]):

“26. Where the authority to lodge a caveat is given in connection with an obligation to pay money, and there is no sufficient indication to the contrary, the implication is that the estate or interest granted is an equitable charge securing that payment (see: Coleman v Bone (1996) 9 BPR 16,235 at 16,239).

27. Any suggestion that a party did not truly intend to grant such a charge, notwithstanding the terms of the document, is a matter properly left for determination at a final hearing, and does not justify refusing an extension at this interlocutory stage (see: Capital Securities XVII Pty Ltd v Anna’s Garden Pty Ltd [2019] NSWSC 1256 at [49]).

28. A charging clause expressed to be enforceable notwithstanding that the loan does not proceed, or that the owner elects not to accept the offer of finance, has been given effect and enforced (see: Mango Media Pty Ltd v Bassal [2004] NSWSC 1253 at [2], [9]).”

33. For their part, the defendants sought to highlight the legal principles that relate to the weight a Court will give refinancing as a reason the party resists an application for an extension of a caveat:

34. Buchanan v Crown & Gleeson Business Finance Pty Ltd [2006] NSWSC 1465; (2006) 13 BPR 24,513; (2007) NSW ConvR 56-173 per Brereton J (Buchanan);

35. Andrews v Wilcox [2008] NSWSC 280 per Hammerschlag J (Andrews);

36. Finlayson v Bagala [2024] NSWSC 94 per Slattery J (Finlayson).

37. In the course of oral submissions, I was taken by the defendants to each of the decisions, including to what the Court said at [30] of Finlayson:

“[30] It is an important consideration on the balance of convenience to allow the parties to take advantage of the financial benefits of a refinance. ….”

35. I will further discuss the submissions made on this point in my consideration.

Issues

36. Given the terms of the background set out above, together with the legal framework, the issues for determination are:

37. Is there a serious question to be tried (or has the applicant made out a prima facie case)?

38. Does the balance of convenience favour the Court exercising its discretion and making an order to extend the operation of the Caveats?

Issue 1: Is there a serious question to be tried?

37. The plaintiff submits that its claim has substance (per s 74K(2) of the Real Property Act). In making this submission, the plaintiff relied on the evidence that the Caveats record an interest arising under specific, dated Terms of Engagement documents, matching the agreement recorded on the face of the caveat. It is said that clause 4 of each Terms of Engagement is clear and specific as to the property to be charged and the money to be secured (PWS1 [31]-[32]).

38. The plaintiff also relied on the affidavits of Wafa Elmol, and in particular the work she says she carried out under each engagement (PWS1 [33]).

39. The loss suffered by the plaintiff is said to have been calculated at $255,860 (PWS1 [34]).

40. Having regard to the evidence cited, the plaintiff submits that it has demonstrated a reasonably arguable case that some loss has been suffered, and that that loss is secured under each charge (further citing Capital Securities XVII Pty Ltd v Anna’s Garden Pty Ltd [2019] NSWSC 1256 at [38]).

41. By way of reply, the defendants concede that the plaintiff has demonstrated there is a serious question to be tried. The making of the concession was associated with a further submission that the requirement that a caveator demonstrate substance in his or her claim is a test which “is not … very demanding” (DWS [13]). In making this submission, the defendants cite what the Court said in Bride v Registrar of Titles [2015] WASC 11 (Bride) at [13]-[14] (per Edelman J), where it was observed that in considering the issue of substance, “the court does not ordinarily evaluate the applicant’s evidence or undertake a preliminary trial” (DWS [13], Bride at [13]). I accept each of these propositions as being applicable to any consideration of this issue in these proceedings.

42. Having made this concession, the defendant made further submissions as to the relevance of the strength of the plaintiff’s case, but only in so far as it related to the issue of the balance of convenience, which will be addressed below.

43. I am of the view that the concession made by the defendants was properly made. I accept the plaintiff has demonstrated there is a serious question to be tried, that is, that the plaintiff has made out a prima facie case, noting the test is not very demanding. I am of the view that the evidence of the terms of the engagements, and associated evidence of Ms Elmol, meets this test.

Issue 2: Does the balance of convenience favour the Court exercising its discretion and making an order to extend the operation of the Caveats?

44. Having been satisfied that there is a serious question to be tried, it arises to consider whether the balance of convenience favours the Court exercising its discretion to make an order to extend the operation of the Caveats.

45. The plaintiff bears the onus of establishing that the balance of convenience lies in favour of granting an extension of the operation of the Caveats.

46. At a high level, the plaintiff argues that if the Caveats were to lapse, it would expose the plaintiff to risk that their proprietary interest would be derogated from or destroyed (PWS2 [8]). The plaintiff argues there is no identifiable prejudice to the defendant on the evidence (PWS1 [38]). The defendants argue that the substantive case of the plaintiff is weak, and that ought to be balanced with the need to refinance the properties. Consideration of the balance of convenience will weigh these competing arguments.

Removal of the Caveats would derogate from, or destroy, the benefit of the plaintiff’s interest

47. The plaintiff’s first argument in support of the balance of convenience weighing in favour of extending the operation of the Caveats was that, if the Caveats are removed, the plaintiff is exposed to the risk that a subsequent dealing with the properties will derogate from, and destroy for all practical purposes, the benefit of the plaintiff’s interest (PWS2 [8]).

48. The defendants submit that there would remain $2,600,000 in equity in the Properties after refinancing, and so there was little risk of the plaintiff’s interest being derogated. In response, plaintiff submits the equity available to meet the plaintiff’s claim is unknown (PWS2 [9]). The plaintiff also submits that there are other encumbrances on the Properties (PWS2 [7]), and that the defendants have adduced no evidence of the amounts secured by the current encumbrances on the Properties (PWS2 [10]).

49. Whilst it is clear that the defendants have not adduced specific evidence as to the amounts of the respective encumbrances, the first defendant has given the following evidence (CB 278):

“12. On 29 September 2026, I obtained a desktop appraisal in respect of the Caringbah Property and the Surry Hills Property. The appraisals value the properties as follows:

a. Caringbah Property: $4,200,000-4,400,000;

b. Surry Hills Property: $3,500,000.

Copies of the appraisal reports are annexed to this affidavit and marked “D”.

13. As at the date of the affidavit, I understand the available equity in respect of each property to be:

a. Caringbah Property: $1,100,000; and

b. Surry Hills Property: $1,500,000.

14. To the best of my estimate, following the refinancing, the combined available equity in both properties will remain at approximately $2,600,000.”

50. Whilst I accept this evidence is light in so far as evidence of the specific encumbrances go, I accept there is some evidence provided by the first defendant, which he has provided in solemn circumstances on affirmation, that following any refinancing that the combined available equity in both Properties will remain at approximately $2,600,000.

51. Whilst more detailed evidence on these issues would have been preferable, I have no reason to doubt the evidence of the first defendant’s belief and estimate on this. Even if the first defendant was in error in his estimate of the available equity by some significant margin, given the relatively small amount claimed by the plaintiff, being some $255,860, I am of the view that such an error would not be material to the interests of the plaintiff.

52. For this reason, I am of the view that this issue of the impact of the removal of the Caveats on the interests of the plaintiff weighs in the direction of not extending the operation of the Caveats. On the evidence before the Court, there would be more than sufficient equity remaining and available in both properties in order for the defendants to meet any successful claim made by the plaintiff. This is not matter where priority of security is a critical issue; in contrast, for example, to cases where only those creditors first in priority will have their claims met, but not others.

Need for alternative security

53. The plaintiff has also made the following submission in relation to a need for alternative security (PWS2 [11]-[12]) (emphasis added):

“11. The Court has consistently held that a caveat claiming an interest in land as security for the payment of money will be removed only where the party seeking removal offers alternative security that is commercially adequate to protect the caveator's position (see: Marinkovic v Pat McGrath Engineering Pty Ltd [2004] NSWSC 571 [Markinovic] at [56], Campbell J).

12. Unless appropriate alternative security is provided, the Plaintiff submits the caveats should not be removed.”

54. I do not accept that the terms of the submission made above are supported by what the Court said in Markinovic at [56]. In Marinkovic, the Court considered the issue of the removal of a caveat, and relevantly stated (at [55]-[56]):

“[55] An example of the Court’s jurisdiction to order removal of a caveat is where land which is subject to a mortgage has been sold for a price which will be completely payable to the first mortgagee. In such a case a subsequent mortgagee is not entitled to maintain a caveat which will prevent completion of that sale: Wildschut v Borg Warner Acceptance Corporation (Aust) Ltd (1987) 4 BPR 9453; Dunecar Pty Ltd (in Liq) v Colbron [2001] NSWSC 1181 at [18]-[19].

[56] This is an example of the way that the Court will not permit a caveat to be used as a device for exerting commercial pressure. In such a case the caveat is legitimately lodged in respect of a disputed claim, but forces the registered proprietor to pay out that claim even though it is disputed. The Court has consistently taken the attitude that where the caveat claims an interest in land as security for the payment of money, if the registered proprietor is prepared to put up an alternative security which is commercially adequate, then it will remove the caveat even though the caveat may be completely valid: Kingstone Constructions Pty Ltd v Crispel Pty Ltd (1991) 5 BPR 11,987 at 11,991; Gibson v Co-ordinated Building Services Pty Ltd (1989) 4 BPR 9630; Australian Property & Management Pty Ltd v Devefi Pty Ltd (1997) 7 BPR 15,255 at 15,257.”

55. It will be seen that the Court in Marinkovic was concerned with circumstances where the operation of a caveat was being used to exert commercial pressure, which I do not understand to have been suggested has occurred in these proceedings. It was in these circumstances that the Court observed that the Court has consistently taken the attitude that where the caveat claims an interest in land as security for the payment of money, if the registered proprietor is prepared to put up an alternative security which is commercially adequate, then it will remove the caveat even though the caveat may be completely valid.

56. It will thus be seen that it is not the case on the authority provided, as submitted by the plaintiff, that the Court has consistently held that a caveat claiming an interest in land as security for the payment of money will be removed only where the party seeking removal offers alternative security that is commercially adequate to protect the caveator's position.

57. I am of the view that the submission made by the plaintiff on this issue is not supported by the case cited and does not support the plaintiff’s application to have the operation of the Caveats extended.

Defendants’ submissions

58. The defendants submit that the balance of convenience favours the removal of the Caveats, and rely of three major factors in support of that submission: the merits of the plaintiff’s substantive case is poor; there is a need to refinance the properties of which there is no evidence that the contemplated refinancing will prejudice the asserted interests of the plaintiff; and that the asserted cumulative charges claimed by the plaintiff, being approximately $255,000, are relatively small in comparison to the available equity (DWS [20]-[21]). I will address each of these factors in turn.

Merits of claim

59. The defendants submit that the strength of an applicant’s case is a relevant factor to have regard to when a Court comes to consider balance of convenience. Noting the legal principles I have set out above, I accept this submission.

60. The defendants further submit that the plaintiff’s prospects of success, in the substantive claim, are poor (DWS [23]).

61. In support of this submission, the defendants refer to each of the three Terms of Engagement (see [22] above), and in particular where the engagements state “We now have confirmed interest from a lender for this funding” (CB 4). Of this, the defendants submit (DWS [26]):

“[26] The evidence fails to disclose any such interest obtained by the Plaintiff prior to execution of any of the Terms of Engagement. Indeed, the Plaintiff’s evidence seems to suggest that, in respect of each of the terms of Engagement, the Plaintiff only began attempting to obtain financing for the Defendants after execution”.

62. The defendants say that the representation that the plaintiff had already “confirmed interest from a lender” was one of the reasons which “induced” the defendants to enter into the contract, and they state that the representation was an inaccurate description of the state of affairs. In oral submissions the defendants pointed to a number of defences that were available to them based upon this evidentiary characterisation, including misrepresentation and misleading and deceptive conduct. Other potential defences were also raised which included that the contract was unfair, that the fees were penalty terms, and that the Final Terms of Engagement superseded the first two (DWS [28]).

63. In making these submissions, the defendants placed great weight on the fact that the plaintiff has not put on detailed evidence as to the steps that had been taken to make good the representation in the engagements that “We have now confirmed interest from a lender for this funding”.

64. There are two reasons I do not accept the submissions made by the defendants in relation to the state of the plaintiff’s evidence on this issue.

65. Firstly, counsel for the plaintiff explained, from the bar table, that the plaintiff had only become aware of the defences claimed by the defendants as recently as 21 September 2026, which was when the first of the first defendant’s affidavits was put on. It was in this affidavit that the first defendant, amongst other things, sets out versions of conversations with Ms Elmol, and disclosed he had formed the view that the plaintiff did not in fact have confirmed interest from a lender at the time the engagements were signed (CB 272 [15], 273 [20], [25]).

66. Following this, when Ms Elmol made her affidavit in reply, dated 28 September 2026, to the first defendant’s 21 September 2026, Ms Elmol denied versions of conversations with the first defendant as alleged by the first defendant, and explicitly gave evidence against the first defendant’s allegations (at [15], [20], and [24] of her affidavit).

67. During the course of oral submissions, the defendants stated that the plaintiff was on notice of the allegations from at least March of this year, and took me to correspondence dated 24 March 2026 from the solicitors for the defendant to the plaintiffs (CB 281-285). Having reviewed the letter, I accept that some of the substance of the defences now claimed by the defendants were then raised. However, I am of the view that the defendants’ current focus on the significance of the steps taken by the plaintiff in relation to confirming interest from a lender, or not, was not clearly articulated at that point. I accept the submission of the plaintiff that that part of the claim was only clearly evident once the 21 September 2026 affidavit of the first defendant had been served. I accept that the denials contained that the evidence in reply of Ms Elmol dealt with the issue sufficiently for the purposes of the current application, and accept that the appropriate venue for detailed evidence on this issue from the plaintiff will be the substantive proceedings.

68. Accordingly, I reject the suggestion of the defendants that firstly, there is no evidence before the Court on the part of the plaintiff on this issue. Secondly, I do not accept that the lack of detailed evidence in reply on the issue of the “confirmed interest from a lender” supports the allegation the case of the plaintiff is weak.

69. Whilst I accept that the plaintiff’s evidence currently before this Court on this issue, in this caveat application, is not much beyond a denial, I do not necessarily consider this to be inappropriate. To adopt the submission made by the defendant in relation to Issue 1 (see [41] above), “the court does not ordinarily evaluate the applicant’s evidence or undertake a preliminary trial”.

70. Given the above considerations, I am of the view that the issue of the merits of the plaintiff’s case is neutral when I come to consider the balance of convenience.

Desire to refinance

71. The defendants submit that the ongoing operation of the Caveats in relation to the Properties will hamper their ability to refinance the Properties. In support of the submission, I have had regard to the affidavit evidence of the first defendant who has stated that he was “currently unable to obtain refinancing in respect of [the Properties] as long as the Caveats remain on the respective titles” (CB 278). The defendants submitted that their desire to refinance arose from the fact that they were defaulting on debt obligations.

72. The plaintiff submitted that the circumstances of the cases relied on by the defendants were to be distinguished from those of the defendants, as the defendants have not put on any concrete evidence as to actual refinancing. In making this submission, the plaintiff referred to the affidavit of the first defendant, which simply stated that he had “made significant progress in respect of refinancing”, “including by speaking to Logan Lee of Borrow Mortgage”, and that he had received two formal offers in relation to refinancing the Surry Hills property (CB 278 10-11).

73. I accept the submission that the defendants would suffer a prejudice if they were unable to refinance the Properties. In accepting this submission, I note there is limited evidence on the defendants desire to refinance or steps taken to achieve that. However, I note the authorities citing circumstances where parties are to take advantage of the financial benefits of a refinance, have considered this an important consideration on the balance of convenience. Consequently, I do not accept the submission of the plaintiff that there was no identifiable prejudice to the defendants on the evidence (PWS1 [38]).

74. The defendants claim that there is no evidence that the contemplated refinancing will prejudice the asserted interests of the plaintiff (DWS [21]).

75. I have already addressed the essence of this issue in response to submissions made by the plaintiff (at [48]-[52]). For the reasons already explained, I accept this submission, and consider that there is no evidence before the Court which would support a suggestion that subsequent dealings by the defendants will derogate from the benefit of the plaintiffs interest, given its nature and amount.

Charges claimed by the plaintiff are small and there are suitable alternatives

76. As noted above, the defendants submit that the charges claimed by the plaintiff, cumulatively valued at approximately $255,000, are relatively small in comparison to the available equity of approximately $2,600,000. The defendants submit the charges being relatively small is a factor that should weigh in the balance of convenience in the direction of not extending the operation of the Caveats.

77. Related to this submission is the contention of the defendants that there are suitable alternatives to the continuing operation of the caveat. One class of alternatives offered for the defendants to make a number of undertakings (set out at DWS [35], summarised at [14]), which includes an undertaking that the defendants will not increase or seek to increase the amount drawn upon the properties in the proposed refinancing (DWS [35](b)(ii)).

78. Further in the alternative the defendants have sought an order that the plaintiff be granted leave to lodge a further caveat, in due course, pursuant to s 74O of the Real Property Act.

79. The plaintiffs also proposed a potential alternative, being that they would be content for the caveats to lapse if the value of their interest was paid into Court pending final determination of the proceedings. The defendants submitted this course of action would be inappropriate as it would be tantamount to security.

80. I accept the submission that the nature of the interest, being for money payment of an amount of $255,860, relative to the value of the properties and the defendants’ equity in them, is a factor that weighs in the direction not making an order to extend the operation of the Caveats. I consider this to be the case in particular noting the imposition of the Caveats is an effective barrier to the defendants undertaking refinancing, and where I am of the view that at least one of the suggested alternatives, in all of the circumstances, appears suitable.

81. I am not satisfied that payment into Court would be a suitable alternative. On the defendants’ evidence, they have $2,600,000.00 in equity; there is no suggestion there is cash available to make this payment. Further, the defendants have indicated there are debt obligations they are already in default of; in this way, I consider that payment of $255,000 into Court could greatly prejudice the defendant and affect their ability to manage their financial position. I accept the submission of the defendant that payment into Court of the $255,000 would be tantamount to security.

82. More generally, I am satisfied that the interests of the plaintiff will be protected if it is permitted to lodge a further caveat in due course pursuant to s 74O of the Real Property Act. However, in order to provide a suitable degree of protection for the plaintiff, the time between the ceasing of the operation of the current Caveats, and the lodgement of fresh caveats, will need to be as brief as possible, so as to allow the defendants to carry out the refinancing. The length of time will need to be sufficient to enable the defendants to refinance.

83. To this end, the defendants have proposed (albeit in the alternative) that the plaintiff be permitted to lodge further caveats with respect to the same interests in the Properties as claimed in the current Caveats, either immediately after registration of the discharge of the current mortgage and registration of a new mortgage, or 56 days from the date the current Caveats ceased to operate (DWS [36]).

84. I am of the view that the suggested alternative in the form of the s 74O order is a suitable alternative which would balance the respective interests of the parties. I consider that the existence of the formulation of the alternative order pursuant to s 74O weighs in the direction of not extending the operation of the Caveats.

Conclusion

85. Having considered all of the relevant circumstances, and for the reasons set out above, I have decided that the balance of convenience favours the Court not exercising its discretion and thus not making the order sought to extend the operation of the Caveats. Whilst I accept the plaintiff has established there is a serious issue to be tried, I have decided that the prejudice to the plaintiff in being deprived of the protection of the Caveats for some 56 days is outweighed by the prejudice to the defendants which results from the ongoing operation of the Caveat, where the defendants are unable to refinance their properties.

Costs

86. The plaintiff has sought its costs of the application (PWS1 [40](f)). The defendants submitted that their costs of and incidental to the plaintiff’s application ought to be paid by the plaintiff as agreed or assessed (DWS [39]). Neither party made any submissions of substance in relation to the issue of costs.

87. As is uncontroversial, s 98(1) of the C**ivil P**rocedure A**ct 2005 (NSW) gives the Court a broad discretion with respect to costs, though that discretion is to be exercised judicially: Netdeen Pty Ltd t/as GJ Gardner Homes v Lindfield NSW Pty Ltd (No 2) [2025] NSWCA 218 at [14] (Stern and Ball JJA, Griffiths AJA); Yu v Cao (2015) 91 NSWLR 190; [2015] NSWCA 276 at [136] (McColl JA, Sackville AJA and Adamson J agreeing).

88. The general rule is that costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs: Uniform Civil P**rocedure Rules 2005 (NSW) (UCPR) r 42.1.

89. As the application before me concerned the interlocutory relief claimed in the plaintiff’s summons, UCPR r 42.7(1) relevantly provides:

42.7 Interlocutory applications and reserved costs

(1) Unless the court orders otherwise, the costs of any application or other step in any proceedings, including—

(a) costs that are reserved, and

(b) costs in respect of any such application or step in respect of which no order as to costs is made,

are to be paid and otherwise dealt with in the same way as the general costs of the proceedings.

90. Whether a costs order departing from the general rule should be made will depend on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [8] (Beazley, McColl and Basten JJA); State of New South Wales v Stanley [2007] NSWCA 330 at [18] (Hislop J, Beazley and Tobias JJA agreeing).

91. The defendants have been successful in these proceedings. They have successfully opposed the application for the extension of the operation of the Caveats and have also proposed an alternative order that I consider suitable. Considering the plaintiffs have been unsuccessful, and it was the defendants proposed alternative I adopted, I consider it is clear the plaintiffs in justice should bear the costs consequences of the interlocutory application (per Kyriacou v Raphis Securities Pty Ltd (No 2) [2022] NSWSC 339 at [28]).

92. Having regard to all of the circumstances, I propose to make the order sought by the defendants that the costs of the defendants, of and incidental to the plaintiff’s application, be paid by the plaintiff as agreed or assessed on the ordinary basis.

Orders

93. For the reasons set out above, I make the following ORDERS and NOTATIONS:

94. The Court NOTES the ORDER made by Bennett J on 30 September 2026 which extended the operation of the caveats X, X, and X (the Caveats) until further order.

95. The order made by Bennett J on 30 September 2026 extending the Caveats until further order of the Court ceases to have effect; with effect from 2 October 2026.

96. LEAVE GRANTED to the plaintiff pursuant to section 74O of the Real Property Act 1900 (NSW) to lodge further caveats with respect to the interests in the X X Street, Caringbah South NSW 2229 (folio identifier X/X) and X X Street, Surry Hills (folio identifier X/X) as claimed by the Caveats, either immediately after registration of the discharge of mortgage number X and registration of a new mortgage, or 56 days from the date the Caveats ceased to operate, being 2 October 2026.

97. The Court NOTES the intention of the plaintiff to commence proceedings in the District Court of New South Wales in relation to the subject matter of these proceedings.

98. The plaintiff is to the pay the costs of the defendant of this application on the ordinary basis.

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