A P. Welco Holdings Pty Ltd v Canterbury Hills Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S ECI 2022 00622

A. P. WELCO HOLDINGS PTY LTD (ACN 640 948 643)	First Plaintiff
UPPER SUNBURY DEVELOPMENTS PTY LTD (ACN 653 663 622)	Second Plaintiff
v
CANTERBURY HILLS PTY LTD (ACN 075 414 390)	First Defendant
FENDALL FARMS PTY LTD (ACN 004 777 897)	Second Defendant

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JUDGE:	Button J
WHERE HELD:	Melbourne
DATE OF HEARING:	9 August 2022
DATE OF JUDGMENT:	24 August 2022
CASE MAY BE CITED AS:	A. P. Welco Holdings Pty Ltd v Canterbury Hills Pty Ltd
MEDIUM NEUTRAL CITATION:	[2022] VSC 490

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REAL PROPERTY – Caveat – Application to remove caveat pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic) – Where caveator alleged that its equitable interest arose from its potential entitlement to specific performance of an alleged agreement for the development of the land and sale of developed lots – Where caveator not clearly identified as a party to the agreement, specific enforcement of which was said to give rise to the equitable interest – Where caveator’s interest misdescribed on caveat due to unavailability of applicable description on PEXA – Whether agreement a final agreement for the development of the land – Whether deeming provisions in the Duties Act 2000 (Vic) created an equitable interest in land – Whether agreement remained on foot on the date the caveat was lodged – Whether caveator had shown the existence of a prima facie case – Whether balance of convenience favoured removing the caveat – Caveat removed – Transfer of Land Act 1958 (Vic) s 90(3) – Duties Act 2000 (Vic) Ch 2 Pt 4B.

EQUITY – Equitable estates and interests – Where caveator alleged an equitable interest arising from its potential entitlement to specific performance of an alleged agreement for the development of land and the subsequent sale of lots with the proceeds shared between the developer and landowners – Where caveator relied on ‘doctrine’ said to have been recognised in Commissioner of State Revenue v Snowy Hydro Ltd (2012) 43 VR 109 —Whether contract of the type alleged capable of giving rise to an equitable interest in land – Whether deeming provisions in the Duties Act 2000 (Vic) created an equitable interest in land – No equitable interest - Duties Act 2000 (Vic) Ch 2 Pt 4B – Commissioner of State Revenue v Snowy Hydro Ltd (2012) 43 VR 109.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	S Senathirajah QC D Morgan	King & Wood Mallesons
For the Defendants	G Dalton QC S Hibble	Baker McKenzie

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Legislation and legal principles...................................................................................................... 5

Evidence............................................................................................................................................... 7

The parties’ submissions................................................................................................................ 10

Consideration.................................................................................................................................... 20

The equitable interest associated with the potential remedy of specific performance..... 22
Nature of the MOA..................................................................................................................... 28
Parties to the MOA..................................................................................................................... 31
Termination of the MOA............................................................................................................ 32
Equitable interest arising from deeming under the Duties Act........................................... 34
Misidentification of interest in the Caveat.............................................................................. 35
Balance of convenience............................................................................................................... 36

Disposition........................................................................................................................................ 37

HER HONOUR:

Introduction

By summons dated 28 June 2022, the defendants sought an order pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic) (the Act) requiring the first plaintiff to remove caveat AV388412E (the Caveat) from the titles to five parcels of land[1] (the Land).
[1]Volume 10365, Folio 702; Volume 10365, Folio 705; Volume 10365, Folio 706; Volume 10365, Folio 707; Volume 11605, Folio 894.

The Caveat was registered by the first plaintiff on 2 March 2022. That was the day after the plaintiffs commenced this proceeding. No application for an interlocutory injunction restraining the defendants from dealing with the Land was made.

The ‘grounds of claim’ stated in the Caveat are ‘Agreement with the following Parties and Date’, with the parties specified as the ‘Registered Proprietor(s)’, and the date specified as 20 May 2021. The estate or interest claimed in the Caveat is ‘Interest as Covenantee of a Restrictive Covenant’.

The plaintiffs’ statement of claim (the Statement of Claim) is dated 22 April 2022. By the Statement of Claim, the plaintiffs contend that, on or about 20 May 2021, the first plaintiff and the defendants ‘entered into a contract in substance to develop the Land’, defined in the Statement of Claim as the ‘Agreement’.[2]
[2]Statement of Claim, [6].

The particulars to that plea state that the Agreement is partly in writing and partly to be implied. To the extent that it is in writing, it is said to be constituted by a document headed ‘Memorandum of Agreement’ (the MOA) signed by Greg Fifield for the first plaintiff and David Townshend for the defendants. To the extent that it is to be implied, it is said to be ‘implied by law and by all of the circumstances, including in order to give business efficacy to the underlying substantive agreement of the parties’.[3]
[3]Statement of Claim, [6] particulars.

The plaintiffs allege (in paragraph 7 of the Statement of Claim) that the terms of the Agreement included the following terms:

(a) the Defendants would provide the First Plaintiff with access to their project consultants and internal staff, and provide copies of all plans and agreements within their control in order to enable the First Plaintiff to undertake a feasibility assessment of the Canterbury Hills Project;
(b)the Defendants would provide the First Plaintiff immediate access to the Land in order for the First Plaintiff to carry out its duties under the Agreement;
(c) the Defendants would not advertise or enter into negotiations with any other party to market the Land during the term of the Agreement (“Exclusivity Term”);
(d) the Defendants permitted the First Plaintiff or its nominee to sub-divide the Land into lots, develop each of the lots and sell those lots;
(e) the First Plaintiff or its nominee would make to the Defendants three payments totalling $40,000,000 inclusive of a percentage of all gross sale proceeds paid at the transfer of any developed lot;
(f) the First Plaintiff would: (a) have carriage of the development of the Land; (b) provide the expertise to develop and market the Land; and (c) provide the funding to carry out all necessary development activities (including obtaining approvals from relevant authorities) and sales/marketing costs;
(g) the First Plaintiff (or its nominee) and the Defendants would prepare and enter into a “final Agreement” to be known as the “Staged Asset Sale Agreement” (“Final Agreement”) (“Agreement Term”);
(h) the parties would work co-operatively in good faith to clarify and resolve all outstanding matters in order to conclude the Final Agreement (“Good Faith Term”);
(i) the parties would do all that was reasonably necessary to allow each other to enjoy the benefit of the Agreement (“Benefit Term”); and
(j) the First Plaintiff would assume responsibility for all land outgoings and insurance from the date of entry into the Final Agreement.

The particulars to that paragraph state that:

Terms (a) to (h) and (j) are partly in writing and partly to be implied from all of the circumstances (including in order to give business efficacy to the underlying substantive agreement of the parties).
Term (i) is implied by law.

It is to be noted that there is no oral component to the alleged Agreement. Nor are specific contextual facts particularised in support of the existence of the Agreement, or the pleaded terms.

The plaintiffs further plead that, pursuant to the Agreement, between about July and 21 December 2021, the first plaintiff and the defendants ‘worked co-operatively to prepare and conclude the Final Agreement, including to clarify and resolve all outstanding matters.’[4] The term ‘Final Agreement’ is defined in paragraph 7(g) of the Statement of Claim to mean the final agreement, known as the ‘Staged Asset Sale Agreement’,[5] to be prepared and entered into by the first plaintiff (or its nominee) and the defendants. The Statement of Claim makes reference to various drafts of the ‘Final Agreement’ that were exchanged. The plaintiffs allege that, on 21 December 2021, the defendants wrongfully repudiated the Agreement, which repudiation was not accepted.[6]
[4]Statement of Claim, [8].
[5]For the avoidance of doubt, it should be made clear that the MOA used the terminology of ‘Staged Asset Sale Agreement’, and that references to a ‘Final Agreement’ are references to such an anticipated document, which was given the title ‘Project Development Agreement’ in drafts that were exchanged.
[6]Statement of Claim, [14]-[15].

By their prayer for relief, the plaintiffs seek a declaration that ‘the plaintiff’ [presumably a reference to the first plaintiff] and the defendants are bound by the Agreement made by them on or about 20 May 2021, as well as an order for, or in the nature of, specific performance of the Agreement requiring:

a.that within 10 business days of these orders, the Defendants’ solicitors provide a final and signed form of the Final Agreement contemplated by the Agreement, and substantially in the same terms as the form of the execution version of the PDA sent to the Defendants on 31 January 2022. That PDA may only contain additional or varied terms if the parties have agreed to the same; or
b.alternatively, the parties to continue to negotiate the Final Agreement in good faith and in a manner that is consistent with their respective duties to cooperate until the parties reach agreement as to all of its terms, or the Agreement is abandoned by the mutual agreement of the parties.

Additionally, the plaintiffs seek common law damages for breach and/or repudiation of the Agreement, being the loss of the profits to be made from the development by the plaintiffs of the Land.

The plaintiffs also plead a misleading and deceptive conduct claim, based on representations said to have been made by the defendants, and claim loss and damage, being the development-related expenses the plaintiffs incurred.

In their defence, the defendants admit that the MOA was countersigned by David Townshend for and on behalf of the defendants, but note that it was signed by Greg Fifield on behalf of an unspecified Welco entity identified on the first page of the MOA as ‘Entity TBC’. They deny that either the first or second plaintiffs were party to the MOA. They further plead that:

(a) the purpose of the MOA was identified, in Recital B, as being ‘to provide a framework for the Parties to move to a final Agreement known as the ‘Staged Asset Sale Agreement’ within 60 days of the date of signing of this Memorandum of Agreement’;

(b) the MOA was stated, by cl 8, to be subject to both parties being satisfied with the terms of the proposed Staged Asset Sale Agreement; and

(c) the obligations pursuant to the MOA were stated, in cll 2 and 3, to be limited to the term of the MOA itself and the term of the MOA (and accordingly the duration of the ‘Exclusivity Term’ [7]) was ‘within 60 days’ of signing the MOA.[8]

[7]Being the term alleged in paragraph 7(c) of the Statement of Claim that ‘the Defendants would not advertise or enter into negotiations with any other party to market the Land during the term of the Agreement’.

[8]Defence, [6]-[7].

The defendants accept that, following the signing of the MOA, negotiations ensued with respect to the terms of the proposed development. They plead that, while the defendants agreed to extend the term of the MOA and the Exclusivity Term on several occasions, the MOA and the Exclusivity Term ended on 30 November 2021. They contend that, while drafts of a Project Development Agreement (PDA) were exchanged,[9] the defendants did not at any time agree to be bound by the terms of, or execute, any version of the PDA exchanged. They also plead that neither the MOA nor any draft version of the PDA exchanged contemplated the sale of the Land to either plaintiff (or the unspecified Welco entity referred to in the MOA).
[9]As outlined above, PDA is the title given to the draft documents, which the MOA envisaged would be titled ‘Staged Asset Sale Agreement’. These documents were drafts of the ‘Final Agreement’ as defined in paragraph 7(g) of the Statement of Claim.

The defendants also deny the misleading or deceptive conduct allegations.

Legislation and legal principles

The lodging of a caveat is a ‘serious business’ and is not ‘available as a bargaining chip’.[10]
[10]Alliance Developments Pty Ltd v Arbab [2019] VSC 832, [56] (Garde J).

Section 90(3) of the Act provides that:

Any person who is adversely affected by any such caveat may bring proceedings in a court against the caveator for the removal of the caveat and the court may make such order as the court thinks fit.

The principles governing the determination of an application for the removal of a caveat are well-established. The two stage test to be applied, and the nature of the interest necessary to sustain a caveat, were described as follows by the Court of Appeal in AE Brighton Holdings Pty Ltd v UDP Holdings Pty Ltd:[11]
[11][2020] VSCA 235 (AE Brighton), [25]-[29] (Kyrou, Kaye and Sifris JJA) (internal footnotes reproduced as in original; emphasis added).

[25] Section 90(3) of the Transfer of Land Act 1958 (‘TLA’) provides that ‘[a]ny person who is adversely affected by [a] caveat may bring proceedings in a court against the caveator for the removal of the caveat and the court may make such order as the court thinks fit’. It was common ground that the judge was required to apply the following two stage test in determining the application for removal of the Caveat:
(a)First, the caveator must establish that there is prima facie case — in the sense that the case has a sufficient likelihood of success to justify the maintenance of the caveat — that he or she has the estate or interest which he or she claims in the land in question.[12]
[12]Piroshenko v Grojsman (2010) 27 VR 489, 491 [7], 494 [21]–[22]; [2010] VSC 240 (‘Piroshenko’),
(b)Secondly, the caveator must establish that the balance of convenience favours the maintenance of the caveat.[13]
[13]Piroshenko (2010) 27 VR 489, 491 [7]; [2010] VSC 240.

[26] An application for the removal of a caveat does not ordinarily present an occasion for the final determination of disputed factual issues or of the claims which the caveat seeks to protect.[14] A prima facie case may be capable of being sustained by supporting evidence, without the need for the Court to answer the question whether or not that evidence should be accepted.[15] The position may be different when no substantial issue of fact appears and the Court is able to have the claims in question fully argued and decided.[16]
[27] The power of the Court under s 90(3) of the TLA includes discretionary considerations.[17] A successful challenge to the exercise of a judicial discretion requires that error of the kind identified in House v The King[18] be established.
[28] Only a legal or equitable interest in land can sustain a caveat. In Boensch v Pascoe, Bell, Nettle, Gordon and Edelman JJ stated that a mere statutory right to take steps to avoid a transaction does not confer an interest in land that can sustain a caveat.[19] They approved of the following statement made by Green CJ in Martin v Official Trustee in Bankruptcy:
The interest asserted must be in existence at the time of the lodgement of the caveat. The assertion by a caveator who at the time of the lodgement of the caveat does not have an estate or interest in the land that he has commenced proceedings which may result in such an interest being vested in him does not disclose a sufficient caveatable interest.[20]

[29] An equitable interest in land is a proprietary interest which is recognised by equity but not by the common law. By contrast, a mere equity is not a proprietary interest in land. A mere equity has been defined in various ways, including ‘a right, usually of a procedural character, which is ancillary to some right of property, and which limits it or qualifies it in some way’.[21]

[14]Carbon Black [2015] VSCA 126, [38].

[15]Carbon Black [2015] VSCA 126, [38].

[16]Carbon Black [2015] VSCA 126, [38].

[17]Piroshenko (2010) 27 VR 489, 491–2 [11]; [2010] VSC 240; Carbon Black [2015] VSCA 126, [39].

[18](1936) 55 CLR 499, 505; [1963] HCA 40.

[19](2019) 375 ALR 15, 41 [104]; [2019] HCA 49 (‘Boensch’), citing Martin v Official Trustee in Bankruptcy [1990] Tas R 65, 68–9.

[20]Boensch (2019) 375 ALR 15, 41 [104]; [2019] HCA 49. See also Stacey v Stacey [2010] WASC 85, [12].

[21]Swanston Mortgage Pty Ltd v Trepan Investments Pty Ltd [1994] 1 VR 672, 675.

As may be seen, in relation to the first stage of the test, the Court of Appeal in AE Brighton referred to the ‘prima facie case’ test, citing, inter alia, Warren CJ’s judgment in Piroshenko v Grojsman.[22] While Warren CJ referred to the ‘serious question to be tried’ test in Piroshenko, her Honour went on to consider the High Court’s discussion of the two tests (the prima facie case test and the serious question to be tried test) in ABC v O’Neill,[23] and concluded that:

In order to avoid confusion as to the burden which must be discharged by the caveator, it may be that the courts would be better served by talking of a “prima facie case giving rise to a serious question to be tried” or even “a prima facie case with sufficient likelihood of success to justify the maintenance of the caveat” when deciding such applications.[24]

[22](2010) 27 VR 489 (Piroshenko).

[23](2006) 227 CLR 57, discussed in Piroshenko, 492-3 [15]-[17].

[24]Piroshenko, 494 [22].

In Carbon Black Lab Pty Ltd v Launer, the Court of Appeal observed that subsequent cases have indicated that the ‘prima facie case’ test is to be preferred[25] and further referred to Warren CJ’s statement in CFHW Pty Ltd v Burness that the caveator ‘must show that they have a prima facie case with sufficient likelihood of success to justify the maintenance of the caveat’.[26]
[25][2015] VSCA 126 (Carbon Black), [37] (Santamaria, Ferguson and McLeish JJA), citing CFHW Pty Ltd v Burness [2014] VSC 451, [17] (Warren CJ).
[26]CFHW Pty Ltd v Burness [2014] VSC 451, [20], quoted in Carbon Black, [37] (Santamaria, Ferguson and McLeish JJA). See also Lawrence & Hanson Group Pty Ltd v Young [2017] VSCA 172, [38] (Redlich and Kyrou JJA, Keogh AJA).

In relation to the second stage of the test, as a general rule, when considering the balance of convenience, the court should take whichever course appears to carry the lowest risk of injustice if the court should turn out to be wrong in the sense of, eg, declining to order the summary removal of the caveat where the caveator fails to establish its right at trial, or in ordering summary removal of the caveat where the registered proprietors fail at trial.[27]
[27]Bradto Pty Ltd v State of Victoria (2006) 15 VR 65 (Bradto), 73 [35] (Maxwell P and Charles JA); Piroshenko, 497 [38] (Warren CJ); Yamine v Mazloum [2017] VSC 601, [15] (John Dixon J).

Consistent with the analogy between caveats and interlocutory injunctions, there is a relationship between the strength of the prima facie case and the assessment of the balance of convenience. As explained by M Osborne J in Wright v Insert Pty Ltd:

The stronger the prima facie case, the more readily the balance of convenience might be satisfied. It is sufficient that the caveator show a sufficient likelihood of success that in the circumstances justifies the practical effect which the caveat will have on the ability of the registered proprietor to deal with the land in question in accordance with its normal proprietary rights.[28]
[28][2022] VSC 1, [8].

Evidence

The defendants relied on an affidavit of their solicitor, Jake Nicholas Spain, affirmed 20 June 2022 in support of their summons (Spain Affidavit). The Spain Affidavit exhibited, amongst other documents, the Caveat and the MOA. It also exhibited correspondence by which the defendants granted various extensions to the exclusivity period under the MOA. The last of those extensions granted an extension to 30 November 2021.[29] Mr Spain deposed, on instructions from Mr Townshend, that no further extensions were granted.[30] As pleaded by the plaintiffs, and admitted by the defendants, on 21 December 2021, the defendants stated in correspondence that they considered that the MOA was at an end and they were entitled to negotiate with other parties in respect of the sale of the Land and would not be proceeding with the draft PDA in its form as at 9 October 2021.
[29]Spain Affidavit, [14(d)(v)].
[30]Spain Affidavit, [14(e)].

The Spain Affidavit exhibited correspondence exchanged after the defendants became aware of the Caveat. That correspondence included a letter from the plaintiffs’ solicitors, King & Wood Mallesons dated 10 June 2022 which said, amongst other things, that:

Although we acknowledge that the proprietary interest held by A.P. WelCo Holdings Pty Ltd in respect of the Land does not fit neatly within the prescribed “estate or interest in land” options available in the PEXA lodgement portal, the principles and considerations relevant to the question of whether an interest is caveatable in equity is not determined by the options available on the PEXA lodgement portal.[31]

[31]Spain Affidavit, JNS-44.

Mr Spain also deposed, again on instructions from Mr Townshend, to the adverse impacts of the Caveat. In short, he deposed that the lodging of the Caveat:

(a) has the potential to deter potential purchasers in circumstances where the defendants wish to market and sell the Land to third parties;

(b) was impeding the ability of the defendants to conclude refinancing arrangements with their financier, RMBL Investments Ltd (RMBL), thus delaying their access to additional funds that were to have been provided by RMBL;

(c) resulted in the defendants having to obtain updated valuations of the Land, thus incurring further expense; and

(d) was having an ongoing impact on negotiations between the defendants and RMBL regarding further funding arrangements related to the Land.

The plaintiffs[32] relied on two affidavits of their solicitor, Ian Charles Solomon, sworn on 21 July 2022 (First Solomon Affidavit) and on 2 August 2022 (Second Solomon Affidavit). The First Solomon Affidavit exhibited correspondence dated 22 June 2022 by which the plaintiffs offered to consent to the registration of the necessary documents to effect the refinancing with RMBL and to enter into a deed of priority with RMBL. Mr Solomon deposed to no response to that letter having been received by the time he swore his first affidavit.[33]
[32]While the defendants’ summons was directed to the first plaintiff, both plaintiffs appeared at the hearing (without objection) and made submissions. For convenience, I will refer to arguments as having been advanced by ‘the plaintiffs’, although concerning the Caveat lodged, and the equitable interest claimed, by the first plaintiff.
[33]First Solomon Affidavit, [9]-[10].

Mr Solomon deposed, on instructions from personnel of the plaintiffs, that:

(a) the Land is a unique offering in the west of Melbourne with an existing development plan developed by the defendants for a master-planned community with attractive features;[34]
[34]First Solomon Affidavit, [12(a)].

(b) the topography of the Land is different from many sites in the west corridor of Melbourne;[35]

(c) the first plaintiff spent considerable time locating the Land and the plaintiffs will suffer considerable prejudice if they are required to abandon the development of the Land and seek a similar property elsewhere;[36] and

(d) the plaintiffs are ready, willing and able to perform all of their obligations under the Agreement, and have made ‘reasonable financial and other arrangements to allow them to perform all their obligations under the Agreement, the PDA, the Escrow Deed and the Guarantee’.[37]

[35]First Solomon Affidavit, [12(b)].

[36]First Solomon Affidavit, [12(c)].

[37]Second Solomon Affidavit, [8].

The Second Solomon Affidavit exhibited:

(a) two emails said to convey the pleaded representations relevant to the plaintiffs’ misleading or deceptive conduct claim; and

(b) what was described by Mr Solomon as the ‘execution version of the PDA’ sent to the defendants on 31 January 2022.[38]

[38]Second Solomon Affidavit, [10]. That is the form of agreement referred to in the limb of the plaintiffs’ prayer for relief by which they seek an order that the defendants’ solicitors provide a final and signed form of the Final Agreement contemplated by the pleaded Agreement.

The unsigned Final Agreement (ie, the ‘execution version of the PDA’ exhibited to the Second Solomon Affidavit) was drafted anticipating that the parties would be the defendants and the second plaintiff. It contains a provision enabling the second plaintiff to lodge a caveat,[39] but that feature of the draft PDA was not relied on by either side.
[39]Clause 6.7: Second Solomon Affidavit, ICS2-22.

The parties’ submissions

The plaintiffs relied on the statement of principle in Yamine v Mazloum which included the following articulation of the case that the caveator is required to demonstrate in defence of an application under s 90(3) of the Act:

The caveator bears the onus of establishing that there is a serious question to be tried that it does have the estate or interest in land as claimed. What the statute requires is that the caveator show that there is at least some probability on the evidence before the court that they will be found to have the equitable rights or interest in the land asserted by them in the caveat. The court directs its analysis towards the relationship between the caveat that has been lodged and the interest claimed by the caveator.[40]

[40][2017] VSC 601, [15] (John Dixon J) (emphasis added).

In their written submissions, the plaintiffs also relied on the Court of Appeal’s elaboration of the ‘serious question to be tried’ test in Bradto, where Maxwell P and Charles JA said that:

Unless upon such examination the court concludes that the applicant’s claims are not reasonably arguable, that is, they do not have “any real prospect of succeeding”, then the court will ordinarily be satisfied that there is a serious question to be tried.[41]

[41]Bradto, 68 [13].

They submitted that Bradto has been applied in cases under s 90(3) of the Act and cited Super Jacobs Pty Ltd v Faalogo[42] and SixBruce Pty Ltd v Milatos[43] (although both cases cited Bradto on the balance of convenience, not in relation to the serious question to be tried test). In oral argument, the plaintiffs accepted that the test set out by the Court of Appeal in AE Brighton ought to be applied to determination of the defendants’ application for removal of the Caveat.
[42][2019] VSC 778, [16] (Daly AsJ).
[43][2017] VSC 784, [36] (Keogh J).

The plaintiffs accepted that the description of the estate or interest claimed in the Caveat — which was ‘Interest as Covenantee of a Restrictive Covenant’ — is ‘inapt’, but submitted that ‘there is no option on the PEXA lodgement portal that corresponds to the particular equitable interest held by the First Plaintiff in the Land, and accordingly no better description could be used.’[44] At the hearing, the plaintiffs handed up (without objection) a document issued by Land Use Victoria, which set out the available options in the drop-down form on PEXA. They submitted that there is no authority addressing misdescription of the interest claimed in a caveat where the reason for the misdescription arises from the available options in the PEXA form.[45]
[44]Plaintiffs’ submissions, [7].
[45]In oral argument, the plaintiffs referred to the case of National Australia Bank v Sgargetta [2015] VSC 537 (Sgargetta), in which a caveat claiming a freehold interest had been filed, but the interest asserted was a charge. The caveator claimed that he had misdescribed the interest as he selected the ‘best available fit from the drop-down menu that appeared at the Land Victoria website’. Justice John Dixon held that the caveator could not justify the caveat: see [17]-[22]. The plaintiffs sought to distinguish Sgargetta on the basis that in that case the correct description of the caveator’s interest did exist in the drop-down menu (but was not selected), whereas in this case the interest claimed by the first plaintiff did not exist in the relevant drop-down menu.

The plaintiffs relied on what their submissions described as ‘two critical propositions’. Those propositions were as follows:

The first is that the Agreement gives rise to an entitlement to an order for specific performance in favour of the Plaintiffs. The second is that to the extent that a contract in relation to land is specifically enforceable, equity recognises that the enforcing party has a proprietary right commensurate with the availability of specific performance.[46]

[46]Plaintiffs’ submissions, [29].

The plaintiffs acknowledged that the second proposition — that the availability of specific performance gives rise to a proprietary interest in the Land — ‘is not the product of the application of settled equitable doctrine’ and ‘remains uncertain’.[47] They relied, in particular, on the Court of Appeal’s discussion of an argument (referred to by the plaintiffs as the ‘third argument’) of the taxpayer in Commissioner of State Revenue v Snowy Hydro Ltd.[48] That argument was to the effect that a joint venturer’s ability to seek equitable relief to protect its contractual rights relating to the requirement that the other joint venturer make available land held by it (the other joint venturer) for joint venture purposes gave the (first) joint venturer an equitable interest in the land. In particular, the plaintiffs relied on observations made by the Court of Appeal in Snowy Hydro concerning the remaining uncertainty regarding the ‘true basis and scope’ of ‘this doctrine’, on the basis that the Court of Appeal was recognising and referring to a doctrine in the terms of, or reflecting, the taxpayer’s third argument.
[47]Plaintiffs’ submissions, [31], [34].
[48](2012) 43 VR 109 (Snowy Hydro).

Notwithstanding the uncertainty of ‘the doctrine’ in question, the plaintiffs contended in oral argument that, given the summary nature of the jurisdiction on an application to remove a caveat under s 90(3) of the Act, I need not, and should not, make any ‘definitive determination of whether in fact such an interest or such a doctrine has been recognised or ought to be recognised’ as that is a matter for trial.[49] However, the plaintiffs did go on to accept that the question of whether or not the first plaintiff has an equitable interest will not be determined at trial (as it is an issue that only arises in relation to the Caveat), in contradistinction to the question of the availability of specific performance, which informs both the present application and is an issue for trial.[50]
[49]T27.19-26.
[50]T105.13-T106.31.

When asked to identify the nature of the equitable interest claimed (given it does not fall within any established category), counsel for the plaintiffs submitted that the equitable interest was ‘as a party to a contract where the subject matter of the contract is land, and where there is a substantial connection between what the contract requires us to do and the land.’[51] Counsel for the plaintiffs emphasised that ‘it’s the fact that it’s land, and … the fact that it’s got unique features which means … specific performance is the default relief’ which gave the alleged contractual rights a special character.[52]
[51]T57.18-21.
[52]T58.2-23.

In oral reply submissions, counsel for the plaintiffs elaborated, stating that the equitable interest arose from three elements: first, the caveator being party to a contract whose subject matter was land that is owned by the other contracting party; second, the caveator having obligations under that contract, which obligations have a substantial connection with the land in question (here undertaking development activities on the Land); and third, that the land in question was to be sold and the proceeds shared (thus distinguishing the case from other contracts relating to land, such as contracts between a proprietor and builder).[53] It was by directing attention to these elements that the plaintiffs sought to distinguish the Agreement — which, to the extent it was in writing, was contained in the MOA[54] — from the ‘mere licence’ considered by the Court of Appeal in Snowy Hydro.
[53]T104.19-T105.5.
[54]From here on, I will use ‘MOA’ as shorthand to also refer to the Agreement, while noting that the terms of the Agreement pleaded are said to be ‘partly in writing [the MOA] and partly to be implied’. This does no violence to the plaintiffs’ case, as is borne out by counsel for the plaintiffs having referred to the MOA as ‘the Agreement’ in submissions without, for most purposes, distinguishing between the alleged Agreement and the MOA: see, eg, T6.13; T10.18-19; T10.26; T12.16-21.

In relation to the second element from which the plaintiffs said its equitable interest arose, the plaintiffs’ position was that the MOA was not merely a contract obliging the parties to negotiate, but was an immediately binding contract for the development and sale of the Land on the basis set out in Recital C of the MOA (which set out, inter alia, payments required), which had no fixed term.[55] The plaintiffs’ position was that the provision in the MOA for the negotiation of the Staged Asset Sale Agreement only reflected the need (as recorded in cl 4 of the MOA) for each party to consider accounting and tax matters.
[55]In oral argument, counsel for the plaintiffs confirmed that the plaintiffs’ position was that the Recitals to the MOA, headed ‘BACKGROUND’, formed part of the substantive agreement in addition to the numbered clauses contained under the subsequent heading ‘NOW IT IS AGREED’: T7.11-27.

The plaintiffs supported their contention as to the term of the MOA on the basis that cl 2 of the MOA obliged the defendants to provide access to the Land, whereas there was no provision for access in Recital C of the MOA, which set out the terms on which the development was to be undertaken. That is, the plaintiffs argued that in order to develop the Land under the Staged Asset Sale Agreement, the plaintiffs would need access to the Land, but that, without cl 2 of the MOA (ie, if the MOA expired), there would be no such access because the terms of any Staged Asset Sale Agreement would not provide for access to the Land as that was not a term recorded in Recital C of the MOA. They submitted that there was no indication that 60 days was the term of the MOA, notwithstanding the reference to the MOA providing a framework for the parties to move to concluding a Staged Asset Sale Agreement within 60 days. They contended that, if the parties did not move to execute that agreement within 60 days, the only consequence would be that they would be in breach, but that the MOA would not be at an end. This was because, on the plaintiffs’ submission, the MOA would remain in operation ‘until terminated by the parties’.[56]
[56]Plaintiffs’ submissions, [50].

The plaintiffs also highlighted uncertainties concerning the proper construction of the reference in cl 8 of the MOA to the MOA being subject to both parties being satisfied with the terms of the proposed Staged Asset Sale Agreement.

In relation to the issue concerning the parties to the MOA, the plaintiffs submitted that there is ‘evidence before the Court that “Wel.Co” means the First Plaintiff’.[57] The evidence referred to was an email from Mr Townshend to the defendants’ financiers, in which he said ‘the caveat was lodged by Welco as part of the failed Welco deal’.[58] The plaintiffs argued that the fact that Mr Townshend had referred to the caveator (ie, the first plaintiff) as ‘Welco’ could be used to understand Mr Townshend’s intention and knowledge, at the time he signed the MOA, about the entity listed as a party to the MOA referred to merely as ‘Wel.Co’.[59]
[57]Plaintiffs’ submissions, [51].
[58]Spain Affidavit, JNS-58.
[59]T48.1-8.

The plaintiffs advanced an alternate contention that the first plaintiff had an equitable interest due to the operation of deeming provisions in the Duties Act 2000 (Vic) (the Duties Act).

The plaintiffs submitted that the balance of convenience lies in favour of the maintenance of the Caveat. They cited the decision of the Full Court of the Supreme Court of Western Australia in Custom Credit Corporation Limited v Ravi Nominees Pty Ltd,[60] in which it was stated that removal of a caveat will be unusual where an arguable case has been demonstrated, given the proprietary nature of the interest being protected, and the fact that, in many instances, removal of a caveat will have the effect of destroying, for practical purposes, the benefit of the proprietary interest.[61]
[60](1992) 8 WAR 42.
[61]Custom Credit Corporation Limited v Ravi Nominees Pty Ltd (1992) 8 WAR 42, 50 (Owen J, Malcolm CJ and Walsh J agreeing).

The plaintiffs highlighted that the primary relief they seek is specific performance, that the Land is unique and enjoys positive features for development, and that the plaintiffs, having invested time in the development, will suffer prejudice if they have to abandon it and seek another property elsewhere. They contended that, in these circumstances, and in particular because the MOA concerned the development of land, damages are an inadequate remedy. The plaintiffs also questioned the ability of the defendants to meet any award of damages having regard to other extant litigation involving the defendants in the Federal Court (but did not adduce any evidence of the value of the Land, or the defendants’ financial position), and submitted that this, too, meant damages are an inadequate remedy.[62]
[62]No authority was cited in support of this point.

The defendants advanced three principal submissions in support of their contention that the plaintiffs cannot establish a prima facie case that the first plaintiff has the interest claimed in the Caveat.

First, they submitted that the MOA does not contain or constitute a restrictive covenant giving rise to the claimed estate or interest in the Land. In this regard, they submitted that the MOA does not constitute a restrictive covenant as it:

(a) does not impose any restriction on the use of the Land;

(b) does not benefit any other land; and

(c) does not contain any burdens intended to run with the Land.[63]

[63]The defendants relied on the necessary elements of a restrictive covenant set out in Tulk v Moxhay (1848) 41 ER 1143 and the characterisation of a restrictive covenant in Midland Brick Co Pty Ltd v Welsh (2006) 32 WAR 287, [153] (Hasluck J) as a promise restricting land use, given for the benefit of other land, the benefit and burden of which will run with the land in equity provided that certain conditions are satisfied.

Rather, to the extent that the MOA imposed obligations on the defendants, they submitted that those obligations were personal contractual obligations which did not create any interest in the Land. They contended that, unless the caveator established the interest claimed (and not some other interest capable of supporting a caveat), the Caveat ought to be removed.

Secondly, the defendants submitted that the MOA expired on 30 November 2021, such that, even if it did confer the interest claimed while it was on foot, its termination meant that the first plaintiff did not have an interest necessary to sustain lodging the Caveat on 2 March 2022 (nor does it have any continuing interest).

Counsel for the defendants recognised that the express reference to 60 days in the MOA was to be found in Recital B, but contended that, as a matter of construction, the parties to the MOA clearly intended the term of the MOA to be that 60 day period. That submission was linked to the defendants’ submission that (contrary to the position of the plaintiffs) the MOA was not an agreement for development of the Land, but was merely an agreement obliging the parties (who had reached commercial consensus on matters such as the payments to be made and division of the proceeds) to attempt to negotiate a full development agreement, and imposed only limited obligations on the parties in the meantime. Specifically, those obligations were the obligation on the defendants to provide access to their project consultants, staff, plans and agreements to enable ‘Welco’ to undertake a feasibility of the project (cl 1) and the obligation on the defendants to provide access to the Land during the ‘term of [the] Agreement’ (cl 2). The defendants noted that the MOA clearly distinguished between the anticipated Staged Asset Sale Agreement and the ‘Agreement’ constituted by the MOA itself. These were among the ‘textual indications’ relied on by the defendants in support of their submission that the MOA was not an agreement for development, but rather was a much more limited agreement.[64] The defendants characterised the description of the MOA in the plaintiffs’ generally indorsed writ, by which the plaintiffs commenced the proceeding, as an agreement to negotiate as an admission that it was not an agreement for development.[65]
[64]The defendants submitted that the MOA fell within the third category outlined in Masters v Cameron (1953) 91 CLR 353, 360 (Dixon CJ, McTiernan and Kitto JJ).
[65]The defendants cited Molonglo Group (Australia) Pty Ltd v Cahill [2018] VSCA 147, [132] (Maxwell ACJ, Whelan and Kyrou JJA) regarding post-contractual conduct being admissible on the issue of whether the parties intended a document to be a binding contract, but only in limited circumstances such as where the conduct constitutes an admission against interest.

The defendants sought to rely on correspondence post-dating the MOA on the basis that such evidence is admissible to determine whether a contract has been formed, and what its terms are, as distinct from construing terms of a contract. The correspondence referred to included an email from Mr Fifield of ‘Wel.Co’ to Mr Townshend dated 21 July 2021 seeking to extend the exclusivity period of the MOA, in which Mr Fifield stated he was confident of completing the due diligence enquiries and documenting the transaction within the extended timeframe.[66]
[66]Spain Affidavit, JNS-18.

The defendants accepted that, if the plaintiffs’ contention that the MOA was an agreement for development, then it would not have a term of 60 days. However, even in that instance, they maintained that the potential that a remedy requiring specific performance might be ordered at trial did not support the claimed equitable interest. They submitted that Snowy Hydro was in fact contrary to the plaintiffs’ argument that the potential for specific performance to be awarded supported the existence of the claimed equitable interest.

The defendants also observed, in connection with the potential that an order for specific performance may be made at trial, that:

(a) the draft of the PDA which the plaintiffs, by their Statement of Claim, seek an order be executed, is not an agreement between the defendants and the first plaintiff, which is the caveator;[67] and
[67]That draft of the PDA is between the defendants and the second plaintiff: Second Solomon Affidavit, ICS2-6.

(b) the draft PDA contains terms that differ from the terms of MOA in certain respects,[68] such that:
[68]Counsel for the defendants noted that the draft PDA contains obligations relating to funding (cl 7), access to adjoining land (cl 8.6) and a vegetation offset (cl 10.4) that are not contained in the MOA, and that the payment structure in the draft PDA differs from that contained in the MOA in that it provides for payment by way of advance and repayment through an increased landowner payment of 30% of gross sale proceeds, rather than by staged payments of $40 million and a percentage of 20% (cll 18 and 19): T83.19-T85.21.

(i) any order for specific performance of the MOA would not be in the form of an order compelling the defendants to execute the draft PDA (with those different terms); and

(ii) the fuller and different terms in the draft PDA illustrated the nature of terms necessary for an effective development agreement, in contrast to the more limited, core terms required for an effective contract for the sale of land.

Thirdly, the defendants submitted that the first plaintiff is not a party to the MOA. In that regard, they relied on the fact that the MOA was stated to be between the defendants and ‘Wel.Co’, with the cover page including a note ‘Entity TBC’ beneath the ‘Wel.Co’ name. While the defendants noted the plaintiffs’ pleaded contention that the first plaintiff is the ‘head corporate entity in a group of entities known as the Wel.Co Group’,[69] they contended that, if it had been the parties’ intention that the first plaintiff would be a party to the MOA, it would have been identified and named as such, whereas in fact the second plaintiff was incorporated on 14 September 2021 and was plainly intended to be the Welco Group’s vehicle for any subsequent agreement with the defendants.[70]
[69]Statement of Claim, [1(b)].
[70]In their written submissions, the defendants submitted that the second plaintiff was the counterparty to the MOA, notwithstanding that it was incorporated after the date the MOA was signed. In this respect, the defendants relied on s 131 of the Corporations Act 2001 (Cth), which provides that, in certain circumstances, a person can bind a company to a contract entered into by that person on behalf of the company before it is registered.

The defendants further submitted that, if (contrary to their principal submission) the plaintiffs established the existence of a prima facie case, it would only be ‘the weakest of prima facie cases’[71] such that the balance of convenience favours removal of the Caveat.[72] The defendants accepted that the fact that the MOA concerns land, and land is generally regarded as unique, is relevant to the assessment of the balance of convenience, but distinguished cases relied on by the plaintiffs (such as Pianta v National Finance & Trustees Ltd[73]) on the basis that they concerned contracts for the sale of land where purchasers have recognised equitable interests in land.
[71]T93.20-22.
[72]The defendants here cited Wright v Insert Pty Ltd [2022] VSC 1, [8(e)] (M Osborne J) regarding the interaction between the strength of a caveator’s case on the existence of the interest claimed, and the balance of convenience.
[73](1964) 180 CLR 146. The plaintiffs relied on Barwick CJ’s observations (at 151) rejecting a faint submission that, because the respondent was a developer, damages would be an adequate remedy.

The defendants relied on the evidence referred to above concerning the manner in which the Caveat has interfered, and will continue to interfere, with the defendants’ ability to deal with the Land in accordance with their normal proprietary rights, including in connection with selling it to third parties and dealing with their lender. They also submitted that there is little, if any, practical prejudice to the first plaintiff in removing the Caveat as it could have sought to protect any interest it might have by way of interlocutory injunction. Had that course been taken, an undertaking as to damages would have been required. The availability of this alternate means by which the plaintiffs could have protected their interests was said to be relevant to the assessment of where the ‘lesser risk of injustice’ lies.

In relation to the plaintiffs’ contention that damages are an inadequate remedy due to the defendants not being able to meet an award of damages, the defendants contended that, to make good this argument, the plaintiffs would have needed to, but did not, put on evidence of the defendants’ financial position.

Consideration

In determining the present application, the relevant test is the two stage test set out by the Court of Appeal in AE Brighton. The plaintiffs accepted in oral argument that this was the test to be applied,[74] and that, to defeat the application for the removal of the first plaintiff’s Caveat, they must demonstrate that there is a ‘prima facie case’ that the first plaintiff has the estate or interest which it claims in the Land, meaning a case with a sufficient likelihood of success to justify the maintenance of the Caveat.
[74]As outlined at paragraphs 30 to 32 above, the plaintiffs had, in their written submissions, relied on the ‘serious question to be tried’ test and the elaboration of that test in Bradto, and submitted that Bradto has been applied in cases under s 90(3) of the Act. The cases cited by the plaintiffs in their written submissions as instances of the application of Bradto in applications made under s 90(3) of the Act did not involve application of what was said in Bradto regarding what is required to demonstrate a serious question to be tried, but, rather, involved application of what was said regarding the balance of convenience: see Super Jacobs Pty Ltd v Faalogo [2019] VSC 778, [16] (Daly AsJ); Six Bruce Pty Ltd v Milatos [2017] VSC 784, [36] (Keogh J). It is not necessary, in resolving this application, to venture whether or not there is a substantive difference between the Court of Appeal’s articulation of the prima facie case test in AE Brighton, and the elaboration in Bradto of when there will be a serious question to be tried.

I will assume, for the purpose of analysis, and favourably to the plaintiffs, that the plaintiffs have sufficient prospects of obtaining an order for specific performance of the MOA so as to have a prima facie case that they will obtain that remedy.[75] The real question is whether the potential that they might obtain that remedy avails them in establishing a prima facie case that the first plaintiff has an equitable interest which supports the Caveat. If the first plaintiff has an equitable interest of the kind contended for, its interest has been misstated in the Caveat. However the misdescription will be of no consequence if the first plaintiff has not established a prima facie case that it has any equitable interest.
[75]As such, I will not address whether or not damages would be an adequate remedy so far as that matter would arise in considering the likelihood of an order for specific performance being made.

The plaintiffs accepted that the MOA does not itself confer any proprietary interest in the Land on the first plaintiff. Rather, they contended that the first plaintiff has an equitable interest — which interest they acknowledge is novel and not of a kind recognised in any decided case — because:

(a) the MOA is a concluded and binding agreement for the development and subsequent sale (to third parties) of the Land (and not merely an agreement to negotiate with limited rights of access to the Land, personnel and documentation of the defendants); and

(b) having regard to the nature of the MOA as a contract whose subject matter is land, which contains obligations with a substantial connection with the Land, and which provides for the Land to be sold (albeit once subdivided and to third parties) and the proceeds shared, the potential availability of an order for specific performance of the MOA means that the first plaintiff has an equitable interest based on ‘the doctrine’ referred to by the Court of Appeal in Snowy Hydro.

As may be seen, the first contention formed part of the basis upon which the plaintiffs put the second contention.

I have, in what follows, been mindful of observations made by the Court of Appeal regarding an application for the removal of a caveat not ordinarily presenting an occasion for the final determination of disputed factual issues, or of the claims which a caveat seeks to protect.[76] However, as noted above, the ultimate correctness of the second contention — which goes to the existence of an equitable interest — is not a matter that will arise for consideration at trial, and the Court of Appeal’s observations are to be applied in light of that consideration.[77] By contrast, the first contention — concerning the proper characterisation and construction of the MOA — is a matter that will arise for consideration at trial.
[76]See, eg, AE Brighton, [26] (Kyrou, Kaye and Sifris JJA).
[77]Carbon Black, [38] (Santamaria, Ferguson and McLeish JJA).

In my view, and without finally deciding the issue, the plaintiffs’ case on the second contention is so weak that they have not established a prima facie case that the first plaintiff has the equitable interest for which the plaintiffs contend. For the reasons set out below, the Court of Appeal’s decision in Snowy Hydro does not support the existence of the novel equitable interest claimed by the first plaintiff. In my view, satisfaction of the first stage of the two stage test (as set out in AE Brighton) involves more than raising a novel argument to support a hitherto unrecognised equitable interest. The maintenance of a caveat cannot be justified on such speculative grounds.

As set out further below, even if the foundation for the asserted equitable interest is stronger than I have appreciated, the plaintiffs’ claim that the first plaintiff held that equitable interest rests on the following foundations:

(a) the MOA was a binding agreement for the development and sale of land;

(b) the first plaintiff was a party to the MOA; and

(c) the MOA had not been terminated, but remained on foot, when the Caveat was lodged.

Each of those foundations also suffers from weaknesses that lead me to conclude that the plaintiffs have not met their burden of establishing a prima facie case that the first plaintiff has the interest claimed.

The equitable interest associated with the potential remedy of specific performance

As noted above, the plaintiffs’ second (and central) contention was that the availability of an order for specific performance of a contract ‘in relation to land’ means that equity ‘recognises that the enforcing party has a proprietary right’ capable of supporting a caveat. In support of this contention, they relied on what was said by the Court of Appeal in Snowy Hydro.

The issue before the Court of Appeal in Snowy Hydro concerned application of the land rich provisions of the Duties Act. The trial judge had concluded that one party to an unincorporated joint venture (CP) had a 40% equitable interest in land upon which the joint venture was conducted. The land, and the generator units which formed part of the land (together, the facility), were owned by the other joint venturer (VP). The joint venturers held their interests in the joint venture on a 60:40 basis. Under the terms of the joint venture agreement, VP contracted to ‘make available and dedicate to the Joint Venture’ its freehold interest in the facility.

The Court of Appeal considered, and disagreed with, the trial judge’s conclusion that CP obtained a proprietary interest under the joint venture agreement. The Court of Appeal also considered and rejected an argument that the contractual promise to share the proceeds of any part of the facility was sufficient to give CP an equitable interest in the facility. In rejecting this argument, the Court of Appeal stated that ‘the proposition that a promise to share proceeds of sale of an asset is sufficient, without more, to constitute the promisee an equitable owner of the asset is unsupported by authority and contrary to principle, and must be rejected.’[78]
[78]Snowy Hydro, 124 [53] (Maxwell P, Redlich JA and Robson AJA).

The Court of Appeal’s description and analysis of the taxpayer’s third argument in Snowy Hydro should be set out in full:[79]
[79]Snowy Hydro, 125-6 [57]-[62] (emphasis in bold added; emphasis in italics in original; citations in original).

[57] In the course of argument, the taxpayer advanced a quite different basis, not mentioned in its detailed written submissions, for the proposition that the JVA gave CP an equitable interest (as to 40%) in the facility.
[58] This alternative argument assumed, contrary to the primary submission, that there was no express or implied intention to give CP a proprietary interest. The argument assumed that CP’s rights (as joint venturer) under cl 3.2(b) were purely contractual, but contended that CP’s ability to seek equitable relief to protect those rights gave it an equitable interest in the land. According to the submission, if VP’s promise to make the facility available to the joint venture were enforceable at the suit of CP, by injunction or by order for specific performance, that would give CP an equitable interest in the land.
[59] Both in argument and in a supplementary written submission, the taxpayer invoked the well-known line of authority holding that a purchaser of real estate under an uncompleted contract of sale has an equitable interest in the property.[80] The written submission cited the following passage from the joint judgment of Deane and Dawson JJ in Stern v McArthur:[81]
[80]See the discussion in Nolan v Collie (2003) 7 VR 287 at 296–7, [24]–[28]; see also s 73(1) of the [Duties] Act.
[81](1988) 165 CLR 489 at 522–3 (emphasis added, citations omitted).
As Deane J pointed out in Keen Corporation Ltd v Walter Reid Trading Pty Ltd, it is not really possible with accuracy to go further than to say that the purchaser acquires an equitable interest in the land sold and to that extent the beneficial interest of the vendor in the land is diminished. The extent of the purchaser’s interest is to be measured by the protection which equity will afford to the purchaser. That is really what is meant when it is said that the purchaser’s interest exists only so long as the contract is specifically enforceable by him. Specific performance in this context does not mean specific performance in the strict or technical sense of requiring the contract to be performed in accordance with its terms. Rather it encompasses all of those remedies available to the purchaser in equity to protect the interest which he has acquired under the contract. In appropriate cases it will include other remedies, such as relief by way of injunction, as well as specific performance in the strict sense. As Sir Frederick Jordan put it: “Specific performance in this sense means not merely specific performance in the primary sense of the enforcing of an executory contract by compelling the execution of an assurance to complete it, but also the protection by injunction or otherwise of rights acquired under a contract which defines the rights of the parties”.

To put the matter in this way is to say little more than that the equitable interest of a purchaser under a contract for the sale of land is that which equity recognizes and protects: Hewett v Court, per Deane J. The relationship of trustee and beneficial owner will certainly be in existence when the purchase money specified in the contract has been paid, title has been made or accepted and the purchaser is entitled to a conveyance or transfer. At that point the purchaser is entitled in equity to the land and the vendor is a bare trustee: McWilliam v McWilliams Wines Pty Ltd, per McTiernan and Taylor JJ. Otherwise there is no unanimity upon when the relationship of trustee and beneficial owner arises: Chang v Registrar of Titles, per Mason J. But that does not mean that before that time has arrived the purchaser may not be entitled to a lesser equitable interest than ownership.

[60] The written submission also referred to authorities which were said to illustrate the application of this “principle” to:
(a) options to purchase land, “to find that the optionee has a caveatable interest in the land the subject of the option prior to exercise”;[82]
(b) a floating charge prior to crystallisation, “to find that the chargee has an equitable interest in the charged property”;[83] and
(c) an agreement for lease, “to treat as an equitable lease conferring an equitable interest in the lessee”.[84]

[61] The true basis and scope of this doctrine remains a matter of some uncertainty.[85] But, whatever its scope, it can have no application to a contract of the kind in issue here, where the freehold owner has agreed to do no more than make its land available for “use and occupation” for the purposes of the conduct of a business. That is, as the Commissioner submitted, in the nature of a contractual licence. It may be assumed that, if VP had threatened to make the facility unavailable for the purposes of the joint venture, CP could have sought injunctive relief to restrain the threatened breach of contract. It is quite another matter, of course, to contend that the availability of that equitable remedy had the effect of constituting CP an equitable owner of the land. None of the authorities referred to by the taxpayer gives any support to such a proposition.
[62] It follows, in our view, that the JVA meant what it said. That is, VP as the freehold owner of the facility held the land subject to a contractual obligation to make it available to the joint venture for the agreed purpose. CP’s only proprietary interest in any part of the facility was its leasehold interest in two of the units, which VP had granted CP under the terms of the (agreement for) lease.

[82]Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd (2010) 14 BPR 27,605 at 27,681, [566]–[567]; GPT RE Ltd v Lend Lease Real Estate Investments Ltd (2005) 12 BPR 23,217 at 23,224, [51].

[83]Wily v St George Partnership Banking Ltd (1999) 84 FCR 423 at 433–4, [42]–[46].

[84]Chan v Cresdon Pty Ltd (1989) 168 CLR 242 at 252–3.

[85]See Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 332–3, [53]–[54].

The plaintiffs relied on paragraphs 58 and 61 of Snowy Hydro. They contended that the ‘doctrine’ that the Court of Appeal recognised in paragraph 61 was the argument set out in paragraph 58. On the plaintiffs’ reading of the case, the Court of Appeal recognised ‘the doctrine’, but did not proceed to consider its full extent because, whatever its scope, the ‘doctrine’ would not apply to a mere contractual licence.[86]
[86]T24.23-T25.14.

In my view, the plaintiffs’ reading of what was said by the Court of Appeal is not tenable. The Court of Appeal set out, in paragraph 58, the taxpayer’s argument, not a ‘doctrine’. If the Court of Appeal had, in paragraph 61, been referring to the taxpayer’s argument as the ‘doctrine’, the ‘true basis and scope of which’ remains uncertain, it follows that the Court of Appeal would have been accepting the existence of a doctrine in the terms of the taxpayer’s argument. But the Court of Appeal rejected that argument.

In my view, it is clear from the terms in which the Court of Appeal set out the taxpayer’s argument in paragraph 58, went on to refer to the taxpayer’s invocation of the well-known line of authority concerning the equitable interest held by purchasers of real estate under uncompleted contracts of sale (in paragraph 59), and the ‘application of this “principle” to’ options to purchase land, and other situations (in paragraph 60), that the doctrine referred to in paragraph 61 is the doctrine by which a purchaser under an uncompleted contract of sale for real estate has an equitable interest. That is supported by the Court of Appeal’s reference, in the footnote to the uncertainty concerning the ‘true basis and scope of this doctrine’, to paragraphs 53 to 54 of the High Court’s decision in Tanwar Enterprises Pty Ltd v Cauchi.[87] In those paragraphs the High Court was discussing various matters concerning a purchaser of land’s equitable interest.
[87](2003) 217 CLR 315.

Once that is understood, the Court of Appeal’s statement that the ‘doctrine’ does not apply to a contractual licence cannot sensibly be construed as indicating that some wider doctrine of the kind contended for by the plaintiffs has been recognised, but just did not apply to the joint venture contract in Snowy Hydro as it involved a mere contractual licence. The plaintiffs sought to distinguish the MOA from a contractual licence of the kind before the Court of Appeal in Snowy Hydro on the basis that the MOA had a ‘substantial connection between the plaintiffs and the land’[88] requiring the development, marketing and sale of the Land (rather than a mere licence to use it for a business). However, none of those points of distinction take the MOA outside the realm of an agreement conferring personal contractual rights, including a licence to enter upon the defendants’ land to discharge those obligations. So far as the future sale of the Land is concerned, it bears repeating that there was no proposal that the first plaintiff (or any ‘Welco’ entity) would purchase the Land; what was envisaged was development and sale (of presumably subdivided lots) to third parties.
[88]T26.4-5.

In that regard, it should be recalled that, given the far-reaching impact of equitable interests in property (at least on persons other than purchasers for value without notice), very few additional equitable interests in land have been recognised in addition to trusts of the ordinary kind; estate contracts (contracts for the sale or lease of land[89]), restrictive covenants and the mortgagor’s equity of redemption are three such recognised equitable interests.[90] Mere equities are, of course, not equitable interests.
[89]In England, contracts ‘at one remove’ from contracts to convey interests in land are not considered to be estate contracts: Stuart Bridge, Elizabeth Cooke and Martin Dixon, Megarry & Wade: The Law of Real Property (Sweet & Maxwell, 9^th ed, 2019) [5-073]. The influence of local statutes would need to be taken into account in considering the significance of the cases referred to in that text.
[90]Stuart Bridge, Elizabeth Cooke and Martin Dixon, Megarry & Wade: The Law of Real Property (Sweet & Maxwell, 9^th ed, 2019) [4‑025].

In any event, and importantly, it is clear from paragraph 61 of Snowy Hydro that the Court of Appeal rejected the proposition that the mere availability of an equitable remedy (in that case an injunction) in relation to a contract that concerns land means that the person (potentially) entitled to the remedy has an equitable interest in the land. The Court of Appeal’s rejection of that argument cannot sensibly be said to have turned on the extent of the connection with land being limited in the case of a contractual licence, such that their Honours would have concluded differently in relation to an equitable remedy (whether an injunction or specific performance) in relation to a contract involving the kind of deeper and more far-reaching connection with land evident (as the plaintiffs would have it) in a contract for the development of land and the sale of developed lots to third parties.

Further, as Windeyer J pointed out in Colbeam Palmer Ltd v Stock Affiliates Pty Ltd, the proposition that equity intervenes by injunction to restrain interference with subject matter which is a form of property (such as land) because equity is protecting proprietary rights, involves circular reasoning.[91] It is also reasoning that is difficult to reconcile with conventional thinking regarding the difference between mere equities and equitable interests. While discussions on that topic are legion, the following observations of Bryson J (as his Honour then was) in Double Bay Newspapers Pty Ltd v AW Holdings Pty Ltd[92] are illustrative in the present context as they are to the effect that an equity which depends on success in obtaining the assistance of a court will be a mere equity and not an equitable interest:

The conclusion which I base on [the observations of Kitto, Taylor and Menzies JJ in Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq)[93]] is that a mere equity, meaning a claim to have an equitable interest which can only be enforced by succeeding in some claim to a court for equitable relief (such as a claim for rectification, a claim to set aside a conveyance obtained by fraud or (as I think) a claim the enforcement of which depends on the doctrine of part performance) does not participate in competitions of priorities with equitable interests which have been acquired in good faith, for valuable consideration and in a manner which can be clearly shown without obtaining any decision of the court upholding them.
In the Latec case the mere equity was the claim of a mortgagor whose land had been sold and transferred in purported exercise of a mortgagee’s power of sale to recover the land from the purported purchaser on the basis that there had been a fraudulent exercise of the power of sale. The significance of the difference between the views of Kitto J and Taylor J about the standing of an equitable estate which is subject to an impediment which there is a claim in equity to remove need not be established now and may not be great. Equitable estates which have difficulties of that kind can be left out of consideration for my present purposes. In my opinion each of their Honours’ views shows clearly that an equity which requires the assistance of a court if it is to be established at all does not enter into a competition of priorities with an equitable interest which was obtained for value and without notice of it. A claim which depends on success under the doctrine of part performance is in my view a mere equity of the same kind as the illustration given of a claim which depends on success in a suit for rectification.[94]

[91](1968) 122 CLR 25, 34, cited with approval in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, 241 [92] (Gummow and Hayne JJ).

[92](1996) 42 NSWLR 409.

[93](1965) 113 CLR 265.

[94]Double Bay Newspapers Pty Ltd v AW Holdings Pty Ltd (1996) 42 NSWLR 409, 425 (emphasis added).

For these reasons, I do not accept that the first plaintiff has made out a prima facie case that it has an equitable interest by virtue of the potential availability of an order for specific performance of the MOA.

Nature of the MOA

As set out above, the plaintiffs’ argument regarding the existence of an equitable interest involved reliance on the MOA being correctly characterised as an immediately binding agreement for the development and sale of the Land. For the reasons just stated, in my view, the plaintiffs cannot succeed in making out a prima facie case that the first plaintiff has such an equitable interest even if the plaintiffs are correct in their characterisation of the MOA.

Given that the ambit and content of the MOA will be an issue at trial (cf, the question of whether or not an equitable interest in the Land exists), it is appropriate to be more circumspect in what is said about the contractual obligations embodied in the MOA.[95] While it may be doubted that the evidence to be adduced at trial will have much bearing on the construction of the MOA,[96] counsel for the plaintiffs indicated that there would be contextual evidence that may be relevant, and counsel for the defendants also foreshadowed reliance on post-contractual conduct, going to the question of whether or not the parties formed a contract with the terms contended for. Accordingly, the observations which follow are necessarily preliminary, and uninformed by the evidence and fuller argument that the parties may advance at trial.
[95]AE Brighton, [26] (Kyrou, Kaye and Sifris JJA); Carbon Black, [38] (Santamaria, Ferguson and McLeish JJA).
[96]Given the limits on the admissibility of evidence of surrounding circumstances and pre-contractual negotiations: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 352 (Mason J).

With those caveats,[97] it is appropriate that I state that, in my view, based on the argument and evidence before me, the plaintiffs have only a very weak case that the MOA was an agreement for development of land and of no fixed duration.
[97]No pun intended.

As noted, the MOA was in evidence. It is the only document that forms the basis of the Agreement pleaded by the plaintiffs. As noted above, in oral submissions, counsel for the plaintiffs referred to the MOA as ‘the Agreement’.[98] No oral component of the alleged Agreement is pleaded. Nor are any contextual circumstances referred to in the particulars so as to support the implication of terms in fact.
[98]See, eg, T6.13; T10.18-19; T10.26; T12.16-21.

The MOA was drafted in rough, commercial terms. Nevertheless, it contained two distinct sections: the first was titled ‘BACKGROUND’, and the other was headed ‘NOW IT IS AGREED’, indicating a conscious distinction between what are aptly described as Recitals, and the operative terms. Recital A recorded that the defendants have ‘entered into discussions with Welco relating to a ‘Staged Asset Sale Agreement’’ in respect of the Land. Recital B stated that:

The purpose of this Memorandum of Agreement is to provide a framework for the Parties to move to a final Agreement known as the ‘Staged Asset Sale Agreement’ within 60 days of the date of signing of this Memorandum of Agreement. This ‘Staged Asset Sale Agreement will set out a framework for the efficient development of ‘the land’.

Recital C stated that the ‘terms of the ‘Staged Asset Sale Agreement’ will include the following: …’ and went on to set out terms concerning, inter alia, the payments to be made to the defendants, the division of the proceeds of sale of developed lots (80:20 in favour of ‘Welco’), and ‘Welco’ having carriage of the development project.

The operative terms of the MOA (as distinct from the Recitals stated in the ‘Background’ section) provided for:

(a) the defendants to provide access to their consultants, staff, plans and the like to enable the Welco entity to ‘undertake a feasibility of the project’ (cl 1);

(b) the defendants to provide access to the Land ‘during the term of this Agreement’(cl 2);

(c) the defendants not to advertise or enter into negotiations with anyone else during the ‘term of this Agreement’ (cl 3);

(d) the parties to work cooperatively and in good faith to achieve the optimum accounting and tax outcome for each party, noting that those matters would ‘require clarification during the time period of this Agreement’ (cl 4);

(e) the Welco entity to assume responsibility for all land outgoings and insurance from the date of the Staged Asset Sale Agreement (cl 5);

(f) the parties to maintain confidentiality (cl 7); and

(g) a stipulation that the MOA is subject to both parties being satisfied with the terms of the proposed Staged Asset Sale Agreement (cl 8).

While the MOA made reference, as part of the stated ‘Background’, to the parties working together to ‘ensure there is sufficient unencumbered Security provided to reflect Wel.Co’s investment into the land and facilitate the efficient development of the land and will generally follow the Schedule marked “A” and attached herewith’, the MOA did not refer to any Welco entity having any security interest in the Land. The term ‘Security’ was not defined in the MOA, and the Schedule itself is somewhat obscure. As best it can be understood on its face, the Schedule anticipated the ‘unencumbered release’ of each of the five titles comprising the Land, with anticipated numbers of lots to be developed on each title, to correspond with the lump sum payments to be made to the defendants.

As is apparent:

(a) the MOA drew a careful, and consistent, distinction between ‘this Agreement’ (being the MOA itself) and the anticipated, future ‘Staged Asset Sale Agreement’ (later referred to as the PDA or Final Agreement by the parties);

(b) at the time of entering into the MOA, ‘Welco’ had not undertaken its feasibility study, leaving open the obvious possibility that such a study may yield an unfavourable result and ‘Welco’ would not then proceed with the anticipated Staged Asset Sale Agreement; and

(c) it was recognised that a further and more detailed agreement was required.

For these reasons, approaching the matter on a summary basis, I consider that the terms of the MOA are sufficiently clear that the plaintiffs’ prospects of establishing that the MOA was an immediately binding agreement for the development and subsequent sale of the Land are weak and that it cannot be said that they have established a prima facie case on that point. Accordingly, if I am wrong in my analysis of the existence of an equitable interest where specific performance may be ordered of a contract for the development and subsequent sale of land, I would still conclude that the plaintiffs have not made out a prima facie case that the first plaintiff has an equitable interest as I do not consider they have made out a prima facie case of the kind referred to in AE Brighton that the MOA was a contract for the development and subsequent sale of land.

Parties to the MOA

The Statement of Claim pleads that the defendants and first plaintiff entered into the alleged Agreement. As noted above, the particulars state that the Agreement was partly in writing and partly to be implied. The written component is said to be constituted by the MOA ‘signed by Greg Fifield for the First Plaintiff’.[99] No matters are raised in the particulars, or in the affidavit material, which suggest that the plaintiffs will rely on facts which lend any clarity to the question of which Welco entity the defendants were dealing with, beyond the MOA itself and the email, referred to at paragraph 42 above, sent by Mr Townshend in which he stated that the Caveat had been ‘lodged by Welco’.
[99]Statement of Claim, [6].

Neither the MOA nor the email sent by Mr Townshend avails the plaintiffs in their contention that the first plaintiff was a party to the MOA.

As noted above, the cover page of the MOA identified the ‘parties’ as the defendants and ‘WelCo (ABN: [blank] Entity TBC)’, whereas the full corporate names and ABNs of the defendants were specified. Similarly, the first substantive page of the MOA identified the ‘1^st Party’ merely as ‘Wel.Co’, without an ABN, and listed an address shared by other entities in the Welco group.[100] I do not consider that the plaintiffs have satisfied their burden of establishing a prima facie case that the first plaintiff had an equitable interest based on the potential for specific enforcement of the MOA in circumstances where that document does not specifically identify the first plaintiff as a party to that agreement.
[100]In discussion, counsel for the plaintiffs stated (on instructions) that there are six Welco group entities all with the same corporate address: T47.5-8.

The plaintiffs plead that the first plaintiff is, and at all material times was, ‘the head corporate entity in a group of entities known as the Wel.Co Group … engaged in the business of property development and property investment’.[101] The first plaintiff’s standing as the head of the corporate group does not mean it was identified in the MOA where, to the contrary, the MOA clearly indicated that the Welco entity to be the vehicle was yet to be identified. If the parties intended that the MOA was to be between the defendants and the first plaintiff, it is difficult to think of any reason why the first plaintiff was not properly identified.
[101]Statement of Claim, [1(b)].

The email relied on by the plaintiffs also does not assist. In that email, Mr Townshend stated that the Caveat had been ‘lodged by Welco’, but that email also does not identify the first plaintiff as the entity being referred to.

Termination of the MOA

If, contrary to the foregoing, the first plaintiff conceptually could have had an equitable interest ‘commensurate with’ the potential that it could obtain specific performance of the MOA, such an interest would have necessarily been limited by the principle that a court will not order specific performance of an agreement that is no longer on foot. Accordingly, the potential to obtain an order for specific performance must have remained live as at the date the Caveat was lodged in order to support the lodgment, and continued presence on the titles, of the Caveat. The defendants contended this could not be the case as the MOA was a contract of limited duration and had been terminated (due to the expiration of the last extension) well before the date on which the Caveat was lodged.

The evidence before me on this application included numerous emails by which the defendants agreed to various requests to extend what was described as the ‘exclusivity period’ to allow documentation to be progressed and reviewed. The last such extension was to 30 November 2021.

The defendants submitted that the MOA expired on 30 November 2021 such that, if, during its currency, the MOA was capable of supporting a caveat, it could not do so after it expired.

The Exclusivity Term was set out in cl 3 of the MOA. That clause provided that:

Townshend [ie, the defendants] will not advertise or enter into negotiations with any other Party to market the property during the term of this Agreement.

The MOA did not contain a clause clearly setting out the ‘term’ of the MOA. The defendants have proceeded on the basis that, on the proper construction of the MOA, Recital B of the ‘Background’ section effectively set the term as it provided that the purpose of the MOA was to provide a ‘framework’ for the parties to move to the Staged Asset Sale Agreement within 60 days.

The plaintiffs do not plead a specific ‘term’ for the Agreement, but plead that it obliged the defendants (with the first plaintiff) to prepare and enter into a ‘Final Agreement’. They have also submitted that the obligation was ongoing and contended that failure to conclude the anticipated Staged Asset Sale Agreement within 60 days would only mean that the parties were in breach of the MOA. Counsel for the defendants conceded that, if the plaintiffs were correct in their characterisation of the MOA as being an agreement for the development and sale of the Land, it would not be an agreement with a term of only 60 days, but would be ongoing.[102]
[102]T92.4-17.

It appears to be common ground that the MOA is poorly drafted (to put it mildly) and riven with difficulties in construction.

Unless the MOA was an agreement for development and subsequent sale (the strength of which proposition I have addressed above), it is objectively unlikely that commercial parties would enter into a contract to negotiate (with rights of access to the Land, documents and personnel in the meantime, and to facilitate a feasibility study) of indefinite duration. That is particularly the case where the contract restricted the landowners from negotiating with third parties while the contract remained on foot.

Given my conclusions on the strength of the plaintiffs’ case as to the proper characterisation of the MOA as an agreement for development and subsequent sale, it follows that, in my view, their contention as to the duration of the MOA is similarly weak.[103]
[103]The plaintiffs’ argument as to the term of the MOA (referred to at paragraph 39 above) involved, as a premise, the contention that the MOA was an immediately binding agreement for development, as the lack of any ongoing right of access to the Land forming part of Recital C would otherwise be of no moment.

Equitable interest arising from deeming under the Duties Act

In their written submissions, the plaintiffs observed that ‘for certain statutory purposes, the developer’s interest is treated as analogous to ownership of the land’, referring to Part 4B of Chapter 2 of the Duties Act. In oral submissions, counsel for the plaintiffs made a further submission, to the effect that s 32XD of the Duties Act deems a developer in the position of the plaintiffs to have acquired ‘beneficial ownership’. Section 32XD(1) of the Duties Act provides that:

A person who acquires an economic entitlement in relation to relevant land is taken to have acquired beneficial ownership of the relevant land and, subject to this Part, duty is chargeable under this Chapter accordingly.

Section 32XC(1)(b)(iii) of the Duties Act provides that:

For the purposes of this Part, a person acquires an economic entitlement if — …
(b) under that arrangement the person is or will be entitled, whether directly or through another person, to any one or more of the following — …
(iii) to participate in the proceeds of sale of the relevant land;

The submission based on the Duties Act was only faintly pressed in argument. I do not consider that the breadth of the statutory deeming provision in the Duties Act provides any basis on which to conclude that the plaintiffs have established a prima facie case that the first plaintiff has an equitable interest in the Land. The Duties Act is a complex statutory regime which, like many taxing statutes, involves various deeming provisions and statutory ‘fictions’ to ensure transactions, which might otherwise escape the imposition of duty, are caught by the statute.

The fact that the provisions use the language of ‘beneficial ownership’ is of limited relevance without any foundation upon which to conclude that the provisions have force outside the ambit of the operation of the Duties Act and its internal architecture. Counsel did not point to any such foundation, and did not identify any case in which the complex Duties Act deeming provisions have been said to create an equitable interest, particularly where Chapter 2 of the Duties Act defines the expression ‘beneficial ownership’ in a manner that is at odds with the general law concept of the term.[104]
[104]Section 7(4) of the Duties Act defines ‘beneficial ownership’ to include ‘ownership of dutiable property by a person as trustee of a trust’.

Misidentification of interest in the Caveat

Given these conclusions, it is not necessary to address the description of the estate or interest claimed in the Caveat as ‘Interest as Covenantee of a Restrictive Covenant’ and whether, had any caveatable interest been established by the plaintiffs, the misdescription could have been cured by orders permitting an amendment of the Caveat.[105] While the lodging of caveats without due care, or tactically where there is no proper basis, is to be deplored, I am satisfied based on the material before me that the PEXA system did not contain an available option directly corresponding with the nature of the equitable interest claimed by the first plaintiff. As submitted by the plaintiffs, authorities concerning misidentification of the claimed interest in caveats have not involved circumstances analogous to the present case where the misdescription arises from the unavailability within PEXA of an option properly corresponding with the claimed interest.
[105]The principles to be applied in considering whether an amendment will be permitted were set out by Macaulay J in Percy & Michele Pty Ltd v Gangemi [2010] VSC 530, [93], [96], [101], [104]-[105] and have been widely applied in subsequently decided cases.

Balance of convenience

As the plaintiffs have not established a prima facie case that the first plaintiff has an equitable interest in the Land (let alone the interest claimed in the Caveat), it is not necessary for me to address the balance of convenience. I will, however, note that the significant impositions on the ordinary rights of a registered proprietor of land, which arise when a caveat is registered on title, are obvious and well known. The defendants have also adduced evidence of their desire to market and sell the Land to third parties. The defendants’ ability to market and sell the Land to third parties will be significantly hindered, if not neutralised, while the Land remains subject to the Caveat.

The evidence adduced by the defendants concerning the impact of the Caveat on their financing arrangements is more equivocal. The first plaintiff offered to enter into a deed of priority with the defendants’ financier,[106] but that offer has, it appears, not been responded to.[107] While the defendants have not put on any further evidence since the Spain Affidavit explaining the failure to respond to the offer or otherwise updating the court on the status of their financing arrangements since Mr Spain affirmed his affidavit on 20 June 2022, it was explained in discussion that the defendants’ interest in that offer will depend on whether or not the Caveat is removed. The defendants explained that, if the Caveat is removed, they will not need to take up the offer.
[106]First Solomon Affidavit, [8].
[107]First Solomon Affidavit, [9]-[10].

On the other hand, the plaintiffs’ evidence on the balance of convenience comprised high-level, conclusory assertions about the Land and its value to the first plaintiff. That evidence is so devoid of substance that it does not materially advance the plaintiffs’ position on the balance of convenience. The plaintiffs explained the brevity and nature of the evidence on the basis that it was not necessary to go further at a summary stage (as compared with the evidence they may adduce at trial in support of an order for specific performance). Be that as it may, in my view the evidence was deficient, even approached on that summary basis.

For these reasons, even if I had formed the view that the plaintiffs had established a prima facie case that the first plaintiff had an equitable interest, I would not have formed the view that the plaintiffs have established that the balance of convenience favours the maintenance of the Caveat.

The plaintiffs also contended (on the balance of convenience) that damages would be an inadequate remedy by reason of the defendants’ involvement, and exposure to adverse financial consequences, in other litigation in the Federal Court. However, in my view it was incumbent on the plaintiffs to put on evidence regarding the defendants’ financial position if they sought to rely on a submission that damages would be an inadequate remedy by reason of a lack of financial capacity on the part of the defendants. They did not do so.

Disposition

I will order, pursuant to s 90(3) of the Act, that the Caveat be removed. I will give the parties an opportunity to make submissions on costs and whether there ought to be any stay of the order removing the Caveat.

cited with approval in 63 Buckley Street Pty Ltd v Keeron Nominees Pty Ltd [2011] VSCA 289, [11];
Carbon Black Lab Pty Ltd v Launer [2015] VSCA 126, [35]–[36] (‘Carbon Black’); Lawrence &
Hanson Group Pty Ltd v Young [2017] VSCA 172, [36]–[38].

[2022] VSC 490

24 August 2022