Xcel Rural Properties Pty Ltd v South Creek Dairy Pty Ltd & Anor

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST

1482/02 - XCEL RURAL PROPERTIES v SOUTH CREEK DAIRY JUDGMENT - (Ex Tempore - Revised 6 March 2002) 1 HIS HONOUR: This matter was begun by a summons which was filed on 13 February this year. It sought a declaration that on or about 18 May 2001 the plaintiff, which I shall call Xcel, and the first defendant, which I shall call South Creek, entered into a legally binding agreement under which South Creek granted to Xcel an option to purchase certain land at Marulan. It sought an order that South Creek specifically perform that agreement and an order that a caveat 8231399W be extended until further order of the court. That caveat was a caveat which was due to expire the next day. It was a caveat which had been lodged in December 2001. A lapsing notice had been served on the caveator, and the time of service of that lapsing notice was such that the caveat was due to expire the next day. 2 On 13 February 2002 I made an ex parte order for extension of the caveat and the time for service of the summons was abridged. The caveat, as extended by my order, was due to expire last Friday. 3 The matter came on for hearing in the Registrar's list on Friday. No agreement about an interim regime could be reached between the plaintiff and the defendants, so the matter was referred by the Registrar, initially, to the Master's list. The Master's list was very full on Friday, and the Master could not deal with the matter. He permitted the parties to approach me, sitting as Duty Judge, to see whether it would be possible for me to deal with it that day. On Friday afternoon I commenced the hearing. Within a comparatively short time of the hearing beginning, it became apparent that it would not be possible for the hearing to conclude, and for judgment to be given, in time for an order extending the caveat to be lodged with the Registrar General's Office that afternoon, if I were to reach the view that it was appropriate for the caveat to be extended. 4 On the basis of the material then before me, I declined to extend the caveat, but permitted the argument to proceed on the basis that the argument would form the grounds for an application to give leave under section 74O of the Real Property Act 1900 for the lodgement of a further caveat, to replace the caveat which expired. It is that application which I now deal with. The circumstances that give rise to an application under section 74O to lodge a further caveat are closely analogous to the circumstances in which application is made to extend a caveat. In my view, similar principles apply, namely, consideration of whether there is a serious question to be tried that the caveator has the interest claimed in the caveat, and whether the balance of convenience favours the making of the order. 5 South Creek is the registered proprietor of some broad acre land in Marulan, which is ripe for subdivision into residential allotments. Mr Richard Crosby is the person who stands behind South Creek. 6 Xcel has as its moving spirit Mr Kim Clarke. 7 The evidence discloses that there were a series of discussions between Mr Crosby and Mr Clarke, starting in July of 1999, about the terms on which Mr Clarke, or a company associated with him, might be able to purchase South Creek's land. 8 On 6 June 2000 Mr Clarke, writing on the letterhead of an organisation called Integrated Property Agents, put forward a proposal for the purchase of the land. It included the statement: "Obviously, to put our finance in place for development cost and the purchase of en globo land in each stage, our bankers will need to have a DA approval. We need to enter into an agreement to allow us to prepare the DA for approval." 9 Mr Clarke then set out a suggested timetable, which involved a basis of agreement being reached by 21 June, heads of agreement being signed by 30 June, a management agreement signed for some of the lots proposed to be sold by 30 June 2000, preparation and approval of a DA, a linen plan for stage 2 en globo land registered by February 2001 and settlement of the third stage by August 2001. 10 I mention this because the need for DA approval, and the need for finance, continued as a background to the discussions between Mr Clarke and Mr Crosby. 11 There was no agreement, even in principle, on sale until 22 July 2000. At that time, there was a conversation between the two men where Mr Clarke put a proposal for a price to be paid per lot, with that price escalating each year. Mr Crosby said that that proposal seemed fair enough and that he had a deal on that. The two men then exchanged the names and telephone numbers of their solicitors. 12 On 24 July 2000 Mr Clarke wrote again to Mr Crosby. There were some elements of that discussion which had not been encompassed in their conversation on 22 July. One of those matters was: "Further Draw Downs will be at Xcel Rural Properties' discretion depending on sales and market conditions. To ensure the agreement is binding on both parties, the agreement is by way of a call option for Xcel Rural Properties to buy the property with Richard Crosby having a put option on a company associated with Kim Clarke and Vic Milevsky." 13 So far as the evidence discloses this notion of a put and call option had not been previously discussed. 14 On 19 October 2000 Mr Clarke wrote again to Mr Crosby saying: "This letter is to confirm our agreement yesterday to proceed with the agreement and exchange contract on Stages 1, 2 and 3 and enter into the agreement to purchase the balance of property. Could you please arrange with your solicitor, Mr Norris Owen, to prepare the documentation. In the meantime Justin Kell is preparing the linen plan for Stages 1, 2 and 3." 15 The letter then set out what was said to be the points of agreement. It was said to relate to 190 lots at $15,000 per lot. This is to be contrasted with the letter of 24 July 2000 which had talked about 182 lots. It also set out a table of purchase prices per lot, and per hectare. The price per hectare was in some cases different to the amount of the price per hectare which had been set out in a similar table in the letter dated 24 July 2000. There was also a statement in the letter of 19 October 2000: "For all Draw Downs, the purchaser must notify the vendor of their intention to draw the property down by 30th October each year and settle by the 31st December for that year."

That is likewise a requirement which does not appear to have been present in previous documentation. 16 On 18 October 2000 Mr Clarke gives evidence that he met Mr Crosby at the site and they had a conversation, part of which was to the following effect: CLARKE: "Look, we need to get the legal documentation finished. I am going to have to get finance but I can't do that unless the documentation is in place. I want to make sure we will have an agreement." CROSBY: "Kim, don't worry. You have my word that we have an agreement. I just want to know how many lots we are going to get and I am waiting on the DA. I will make sure my solicitor gets on with the documentation." 17 By that time, no particular application for development approval had been made. 18 However, by the end of October 2000 a plan of subdivision had been drawn up by Mr Kell relating to 189 lots. By 15 November 2000 a somewhat different plan of subdivision had been drawn up with input from Mr Clarke. Mr Clarke gives evidence that he showed that plan to Mr Crosby, who agreed with it. 19 On 10 April 2001 Mr Clarke wrote to Mr Crosby saying: "As discussed this morning on the phone, the DA for 189 lots should be tabled at the council meeting in May for approval. We are currently arranging finance and wish to send valuers and financiers to inspect the site. Our funding is not only for purchase, but also the construction for Stages 1, 2 and 3. This could therefore take some weeks for approval. As we are still awaiting the contract (which could take some weeks to finalise), and do not wish to have outside people inspecting the site without our position being secure, we would be pleased if you could arrange for your solicitor an option to cover the next 45 days. We would see the agreement stating simply: our right to purchase the property within the next 45 days at $2,835,000 which is $15,000 per lot for 189 lots. I am sure that you will be happy for us to exercise the option prior to the 45 days as you would have your total funds. Can you please inform your solicitor of the above. If we could arrange this over the next two days we would like to have our valuer inspect the site early next week." 20 I pause there to note that this proposal is put with a need for finance on the part of Mr Clarke still in existence, and with it being the mutual contemplation of the parties that solicitors will be involved in the transaction. 21 On 11 April 2001 Mr Harold Baker, the solicitor acting for Xcel, wrote to Mr Owen, the solicitor acting for South Creek. He enclosed a copy of the fax I have just quoted and said: "While my client is doing so much in respect of the property it wishes to secure its position pending the signing of the contract and for this purpose requires a simple option over the whole of the property for 45 days at a nominal fee of $1,000 for the price of $2,835,000. My client would like this to be agreed to and signed if possible this week. Would you kindly let me have your reply as soon as possible." 22 On 20 April 2001 Mr Baker sent a fax to Mr Owen saying: "I refer to our requests for contract and Option Agreements. Kim Clarke is greatly disadvantaged by not having any documentation as yet. Can you please inform me when this is likely. Financing rural land is currently very difficult, especially with D/A in process, and especially with no documents of purchase. My client will need settlement time of three months from receipt of documents or 21 days after D/A notification, whichever is the later, to allow for financing. Your urgent documentation would be greatly appreciated." 23 On 26 April 2001 Mr Owen wrote back to Mr Baker. He apologised for the delay, and said it was caused by a need for him to obtain instructions from the client, and be able to complete the work to respond. He said, however, that there were a number of matters requiring clarification. There then followed some matters which went to the commercial bare bones of the arrangement. He continued: "In regard to the matter generally we agree that it would be best for documentation to be entered into as soon as possible. Whether or not an Option is necessary depends on how quickly we can now reach final agreement on the matters in this letter." 24 On 2 May 2001 there was a meeting to discuss the option. Mr Crosby, Mr Owen, Mr Clarke and Mr Baker attended it. Mr Baker asserted that the purpose of the meeting was to document the agreement to purchase the site by way of an option while the final contract for the purchase was being drafted. Mr Crosby said he was concerned about the delay, and asked when settlement would be achieved. Mr Clarke said he was having difficulty with the Sydney Catchment Authority in getting their approval for the subdivision, but all other aspects of the approval process had been covered, and he needed to have the agreement documented for valuing and financing. Mr Clarke gives evidence that Mr Crosby then said, "Kim, you have a deal. You don't have to worry". 25 The men at the meeting then proceeded to carry out a discussion by reference to a Law Society precedent for an option agreement, and at the conclusion of that meeting Mr Owen expressed the view that everything seemed to have been covered. Mr Baker said, "We all know the basis of the agreement that we are going to write up. There is no need for you to stay here, Richard. We will see you later on in the day". Mr Clarke and Mr Baker then drafted an option agreement from the Law Society precedent. 26 On 7 May 2001 Mr Owen sent to Mr Baker an amended version of an option agreement. A covering fax identified amendments which had been made as including amendments to clauses 2, 7, 9 and 10 and in the annexure B amendments to paragraphs 1, 2, 3 and 4. That amended agreement was said to be "now faxed for your further consideration". 27 Mr Baker also drew attention to a problem which appeared to exist with the price stated in the option agreement. That price was stated both on a rate per lot and a rate per hectare and the rate per lot and the rate per hectare did not tally. 28 The fax which I have just mentioned, although dated 4 May 2001, was not actually sent until 7 May 2001. 29 On 8 May 2001 Mr Clarke sent to Mr Baker notes of various amendments which still remained to be made to the option agreement. Mr Clarke's notes were sent on to Mr Owen by Mr Baker. On 15 May 2001 Mr Owen wrote to Mr Baker thanking him for forwarding the documents. Mr Owen's letter included the statement: "It does appear that the option in the introductory paragraph (a) requires amendment as does paragraph 1 to more clearly define the land by reference to the Plan. We have made amendments to the Option as referred to in Kim's notes under the headings, clause 3(b), clause 6, clause 9, Annexure 'B', Annexure 'C' and Annexure 'D'. We cannot follow what Kim means by the notes on page 1 at the top of his note or under clause 1 at the foot of his note." 30 That reference to "under clause 1 at the foot of his note" was to a statement by Mr Clarke: "Should read as follows: will subdivide the land into rural/residential. DA 001-204 has been approved to subdivide the land into Lots 1 and 2 by the Council on 20 March 2001. The Council is currently processing the same DA to allow 1 & 2 to be subdivided into 189 lots plus water treatment site, 71 lots in Lot 1 and 129 lots in Lot 2."

Mr Owen went on to say: "How do you suggest his summary of landholdings be added to the Option? Could you please make final proposed amendments and e-mail the amended form to us." 31 On 17 May 2001 Mr Baker sent an e-mail to Mr Owen. He returned, as an attachment to that email, the option deed with some amendments, which were listed. He concluded by saying: "Subject to your approval and availability Mr Clarke will be in Goulburn next Monday morning 21st May 2001 and would like to execute and exchange the Option deeds with you if convenient at 9.30am at your office. Would you please advise if this is acceptable." 32 The e-mail which I have just quoted was sent by Mr Baker in the late afternoon of Thursday 17 May 2001, and apparently received by Mr Owen at 7am the next day. 33 On 18 May 2001 Mr Clarke gives evidence that he had a conversation with Mr Crosby to the following effect: CLARKE: "My solicitor has told me he has got a copy of the final Option Agreement from your solicitor. He has sent me a copy by e-mail. I am ready to go down with my cheque, but I need the agreement documented so I can complete my financing and valuations. If I don't have the Option Agreement signed I will have to ask the Council to stop processing the DA." CROSBY: "Don't do that. We have a deal. I will arrange to come in and sign it next week at my solicitor's." CLARKE: "Great. I will drop the cheque in next week and try to get the Council moving." 34 It has to be observed that this conversation does not appear to take into account that Mr Baker had, the previous evening, requested some further amendments. 35 On 20 May 2001 Mr Baker faxed Mr Owen saying: "Thanks for your e-mail 18.5.01. I appreciate the difficulty with time available to do the impossible and I have explained this to Kim. He will drop in the option fee of $5,000 to your office on Monday and he will be ready to sign as soon as the documents can be done. He has spoken to Richard and as far as I know all seems okay to go ahead early next week. Please contact me when you are ready." 36 On Monday 21 May 2001 Mr Clarke called in at Mr Owen's office and handed over a cheque for $5,000. Mr Owen paid the cheque into his firm's trust account. 37 On 23 May 2001 Mr Owen faxed Mr Baker saying: "We have now met with our client to discuss the proposed Option. Our client has re-thought his position and does not wish to sign the Option until the position regarding your client's Development Consent application is more clear. In other words he wishes to wait until the Development Consent is granted so that we can be more precise about what is to be included in the documents." 38 On 28 May 2001 Mr Baker wrote to Mr Owen saying: "I refer to your letter of 23 May which I gave to my client shortly before he left for overseas. He informed me he had spoken to your client three times that day with no indication given of your client's change of instructions. As a result my client expressed his extreme disappointment and lost confidence in relying on further assurances … I am instructed as follows: 1. My client will withdraw the Development Application from both the Sydney Catchment Authority (SCA) and Mulwaree Shire Council on his return to Sydney about 31 May 2001 or 1 June 2001 unless satisfactory documentation on the Option Agreement is then available for execution by our respective clients and is so executed and exchanged immediately thereafter..." 39 The letter went on to say that should the agreement be withdrawn Mr Clarke would seek to be reimbursed for his costs to date. 40 On 30 May 2001 Mr Owen wrote to Mr Baker referring to Mr Baker's letter of 28 May and saying: "We have discussed the matter with our client and note that there are some new matters raised in your letter which your client would like included in any Option Agreement. Whilst we appreciate your client's frustrations and difficulties it is suggested that the best method of resolving these is to have a meeting at which we have far more time available than the rather hurried affair which was put together basically at your client's insistence on the previous occasion. We feel sure that the final form of the Option can then be satisfactorily approved by both clients. We are suggesting Friday 8 June at 10am and the writer has marked out the rest of the day so that he and our client would be available hopefully together with yourselves to complete the final form of the Agreement and have it signed on that day." 41 On 1 June Mr Owen wrote again to Mr Baker saying: "Both you and Kim seem to have missed the point of our fax suggesting the conference on Friday next. The writer has made the whole of that day available with the specific intention that we achieve the signing of the Option on that day. The writer does not have time available prior to then for a conference which will achieve that result. Appointments have already been made." 42 On 2 June 2001 Mr Baker wrote to Mr Owen saying: "I confirm attendance of Kim and I at your office Friday 10am 8/6/01 to finalise and sign documents." 43 On 7 June 2001 Mr Clarke sent to Mr Crosby a fax marked "Without Prejudice" which began: "As you are aware I am most concerned about your withdrawal of the agreement to sell us the Betley Park en globo land."

It concluded by saying: "As stated on the phone we have invested eleven months in this project. Our company has planned 40 per cent of its time to be taken up on the project in the next three to five years. Your withdrawal from our agreement has wasted eleven months. We need to know our position immediately. I am reluctant to spend further funds and time until the matter is resolved." 44 On 4 July 2001 Mr Baker wrote to Mr Owen. There had been some discussions between them about an amount which might compensate Mr Clarke for the time and effort he had put into working on the development proposal, and a continuation of that discussion was the main topic of that letter. It concluded: "Would you kindly refund to me cheque in favour of my client for the $5,000 paid to your office on 21 September 2001, being the Option fee for the purchase documentation then in course of completion." 45 On 5 July 2001 Mr Owen wrote back again mainly dealing with the topic of what quantum of compensation might be appropriate, but also saying: "We are taking appropriate steps to arrange for the release of the $5,000 held in our trust account and will forward the same to you shortly." 46 Later that day, 5 July, Mr Owen returned the $5,000 under cover of a letter which asserted that it "was held in escrow in our trust account on behalf of your client". 47 On 16 August 2001 a contract for sale was entered whereby South Creek sold, to D C & O Nominees Pty Limited, part of the land that it had been discussing selling to Mr Clarke's company. 48 On 21 December 2001 a statutory declaration was made which verified the caveat which is the subject of these proceedings. The precise date of lodgment of the caveat does not appear from the evidence, but it is likely to have been on or very soon after 21 December 2001. The interest which was claimed in the caveat was "an equitable interest as the purchaser under a contract for sale". 49 The facts which the caveat asserted gave rise to that equitable interest were: "The registered proprietor and the caveator entered into a contract for sale of the land evidenced by, inter alia, a letter from the caveator to Mr Crosby dated 24 July 2000, a letter from the caveator to Mr Crosby dated 19 October 2000, a letter from Johnson & Sendall, the solicitor for the registered proprietor, to Mr Baker, the solicitor for the caveator, dated 13 February 2001 and a letter from Johnson & Sendall to Mr Baker dated 23 March 2001." 50 It will be observed that this caveat did not claim any interest in the land arising from any Option Agreement. 51 Before me, counsel for the plaintiff argued that there were three bases on which the plaintiff had an interest in the land of South Creek. One was that there was an agreement for sale of land, which was subject to formal contract. The second was that there was an estoppel of the type referred to in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 that an agreement had been reached. The detriment said to have given rise to that estoppel is the payment of the Option fee, and incurring expenses in connection with the preparation of the development application. 52 The evidence includes an affidavit from Mr Clarke which lists expenses incurred in connection with the seeking of the development approval. It lists expenses totalling a little over $118,000, which were incurred over the period from 8 September 2000 to 17 September 2001. 53 The third basis on which an interest in land was submitted to exist was that there was a legally binding Option Agreement arising from the conversation between the two men on 18 May 2001. It was common ground that an option over land confers an equitable interest in the land even before the option is exercised, and even when the option relates to a lot in an unregistered subdivision. (Re: Henderson's Caveat [1998] 1 Qd R 632; Jessica Holdings Pty Ltd v Anglican Property Trust Diocese of Sydney (1992) 27 NSWLR 140; Forder v Cemcorp Pty Ltd (2001) 51 NSWLR 486) 54 For the purpose of the present judgment, I do not propose to set out in any detail the evidence which has been filed on the part of the defendants. There is an affidavit of Mr Crosby which contests numerous of the parts of the evidence where Mr Clarke deposed to conversations between himself and Mr Crosby. For the purpose of an application such as the present, it seems to me that the appropriate way to proceed is on the basis that the plaintiff's evidence will, at trial, be accepted, though also noting that significant parts of that evidence are disputed. (Shercliff v Engadine Acceptance Corp Pty Ltd (1978) 2 NSWLR 729) 55 Even taking that approach there is, in my view, no serious question to be tried about whether there was any agreement for sale of land subject to a formal contract. The whole conduct of the parties in seeking to negotiate an Option Agreement arose from their mutual recognition that no agreement for the sale of land had, at that time, been entered. 56 Neither does it seem to me that there is a serious question to be tried concerning the arising of an interest in land from the Waltons v Maher type of estoppel. The alleged detriment is of the payment of money. It is well established, since The Commonwealth of Australia v Verwayen (1990) 170 CLR 394, that the appropriate remedy when an estoppel is established is the minimum remedy which would cure the injustice resulting from the defendant having resiled from a position which it had led the plaintiff to believe it was taking. Here, there is, in my view, no basis for saying that the minimum equity would extend any further than an order for the repayment of money. 57 The question of whether there is a legally binding Option Agreement is one which is, in my view, not quite so clear. The case that there was a legally binding Option entered into on 18 May is one which strikes me as a very weak case, but I do not think it should be said that it is completely non-existent. Under those circumstances, I then need to consider other elements which would go to the establishment of an enforceable agreement of the type alleged. 58 In the course of argument before me, the defendant submitted that any agreement made on 18 May 2001 was not enforceable because s 54A of the Conveyancing Act 1919 had not been complied with. Counsel for the plaintiff accepts that the Option Agreement, if it was entered into on 18 May, is one which does not comply with the requirements of s 54A of the Conveyancing Act 1919. Thus, it is necessary to establish that there are sufficient acts of part performance of that contract before it is legally enforceable. 59 One requirement of acts of part performance is that the acts must be unequivocally and in their nature referable to some such agreement as that alleged. (Maddison v Alderson (1883) 8 App Cas 467) 60 The Option Agreement is alleged to have been entered into on 18 May. I have said that the expenses connected with the preparation of the development application were incurred over the period up to 17 September 2001. Expenses which were incurred after 18 May 2001 related to geo-technical expenses, and also a planning consultant and some site design services. While it is well established that the mere payment of money is not able to be a sufficient act of part performance, it seems to me that there is a serious question to be tried whether the payment of expenses such as those which were incurred after 18 May 2001, which are related to this particular piece of land, could amount to sufficient acts of part performance. 61 I then turn to consider the topic of the balance of convenience. 62 There are several bases on which the defendants urge me to find that the balance of convenience favoured not permitting any caveat to continue. One was a suggested inadequacy of any undertaking as to damages. A company search was tendered which showed that the plaintiff was a company with a paid up capital of $2. I do not regard that in itself as particularly important evidence. There is also in evidence a search of South Creek Dairy which shows it has a paid up capital of $3, yet the evidence also discloses it owns land worth millions of dollars. In any event, Mr Clarke also proffers an undertaking as to damages. 63 It was also suggested damages were an adequate remedy because this was merely a commercial development. I do not agree with that submission. I see no reason in the present case to depart from the traditional view that equity regards each parcel of land as unique. Further, in this case the plaintiff has applied some money and intellectual effort to this particular piece of land by engaging a surveyor and other consultants to develop the subdivision plans. As well, there would be some difficulty in assessing damages because of the number of approved lots involved and the long period of time involved in carrying out the development. 64 However, the weakness of the case is a factor which is possible to take into account in any assessment of the balance of convenience. (OD Transport Pty Ltd v WA Govt Railways Commission (1987) 13 FCR 500; 71 ALR 356; Bullock v The Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 (FC), at 472; Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729 at 736 - 737; South Sydney District Rugby League Football Club Ltd v News Limited (1999) 169 ALR 120 ;[1999] FCA 1710 at [36] per Hely J) 65 This is a case where there was substantial delay. It is true that, in June 2001, Mr Clarke was asserting that Mr Crosby's company had gone back on an agreement. However, there was never any assertion that this agreement was one which was of itself legally binding until much later than June 2001. Even when the caveat was lodged, the agreement which was asserted to be legally binding was not the Option Agreement, but some earlier agreement for sale. 66 Further, the delay is not just delay by itself. It is delay in circumstances where a third party has acquired an interest in the land. I speak of the interest which has been acquired by the third party under the contract of 17 August 2001. 67 It may be the case that the circumstances in which that third party acquired its interest are such that, if there were to be a litigation between the present plaintiff and that third party about whether the Option Agreement had priority over the interest of the third party, the Option Agreement would be held to have lost priority by reason of the failure to lodge a caveat. As I understand the law on this topic, there is no obligation on a person who has an unregistered interest to lodge a caveat to preserve the priority of that interest - however, in certain circumstances failure to lodge a caveat may lead to loss of priority that the interest would otherwise have had. 68 Whether this occurs depends upon whether the failure to lodge the caveat, when considered in light of all the other circumstances, led another person to acquire an interest in the land on the mistaken assumption that the earlier unregistered interest did not exist (J & H Holdings Australia Pty Limited v Bank of New South Wales (1971) 125 CLR 546 at 554). In the present case, there is a realistic prospect that such a claim could be made out, although on the material before me I cannot express a view about whether it is more likely than not that it would be made out. 69 In all these circumstances, I have come to the view that the balance of convenience is such that the claim of the plaintiff to have an interest in the land over which the caveat was lodged, arising under the alleged oral Option Agreement, should not be permitted to be protected by an ongoing caveat. 70 At the time that there was discussion before me about the appropriate course to take, last Friday, when the prospect of treating the present application as an application under section 74O of the Real Property Act 1900 was raised, neither the parties nor I had focused on the difference between the interest which was asserted in the present proceedings (arising from the alleged option agreement of 18 May 2001), and the interest in the land which is asserted by the caveat. A caveat to assert an interest arising under the Option Agreement would not run foul of s 74O of the Real Property Act 1900. Section 74O says: "(1) This section applies if a caveat lodged under a provision of this Part in respect of any particular estate or interest in land...lapses...and the same caveator lodges a further caveat with the Registrar General in respect of the same estate, interest or right and purporting to be based on the same facts as the first caveat. (2) A further caveat to which this section refers has no effect unless: (a) The Supreme Court has made an order giving leave for the lodgment of the further caveat and that order or an office copy of the order accompanies the further caveat when it is lodged with the Registrar General ...".

71 I would not make an order under s 74O permitting the present caveat to be extended, because there is no serious question to be tried concerning whether the plaintiff has the interest which that caveat claims. 72 To deal with the application that was made to me, all that is necessary is that I make no order on the application for leave under s 74O to lodge a fresh caveat. The order of the court is that the application for leave under s 74O to lodge a fresh caveat is refused.

(Counsel addressed further) 73 After I delivered my reasons for judgment Mr Ogborne made an application that I make an order under s 74O of the Real Property Act 1900 granting leave to his client to lodge a further caveat which related to the part of the land owned by South Creek Dairy which has not been contracted to be sold to DC & O Nominees Pty Limited. 74 I decline to make any such order. Section 74O is, it seems to me, quite clear in the prohibition which it imposes. I have quoted it earlier in my judgment. One of the conditions for the application of s 74O is that, "the same caveator lodges a further caveat with the Registrar General in respect of the same estate, interest or right and purporting to be based on the same facts as the first caveat". 75 The further caveat, which Mr Ogborne is now proposing, would be in relation to a different estate, interest or right in the land and would purport to be based on different facts to those which base the first caveat. It is, it seems to me, quite outside the terms of s 74O. 76 Mr Ogborne also asked that I, on the strength of the material which was before me on Friday, issue an interlocutory injunction restraining the plaintiff from dealing with the balance of the land (ie, that not contracted to be sold to DC & O Nominees). 77 I would not regard the evidence and argument before me on Friday as having been directed to that question. (Different questions concerning the balance of convenience may well arise. As well, there is a question which has not been argued, about whether the plaintiff would have an equitable interest in the land not contracted to be sold to DC & O Nominees in circumstances where the plaintiff had an option to purchase the whole of the South Creek's land, but DC & O Nominees had contracted to purchase part of that land without notice of the plaintiff's option, and the rights of DC & O would prevent the plaintiff ever obtaining specific performance of the entirety of any contract arising from exercise of the option.) For that reason I decline to grant the injunction which is sought. 78 I order the plaintiff to pay the defendants' costs in respect of the present motion. **********

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