Cardinal Constructions Pty Ltd v Ghersinich

[2009] WASC 239

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   CARDINAL CONSTRUCTIONS PTY LTD -v- GHERSINICH [2009] WASC 239

CORAM:   JENKINS J

HEARD:   14 AUGUST 2009

DELIVERED          :   28 AUGUST 2009

FILE NO/S:   CIV 2057 of 2009

MATTER                :Section 138 of the Transfer of Land Act 1893

BETWEEN:   CARDINAL CONSTRUCTIONS PTY LTD (ACN 009 045 069)

Plaintiff

AND

LORRAINE ANNE GHERSINICH
DEREK HENRY NASH
KERRY DIANNE OVENS
JEFFEREY WILLIAM OVENS
First Defendants

REGISTRAR OF TITLES
Second Defendant

Catchwords:

Conveyancing - Caveats - Application to extend - Builder's interest as a chargee under a building contract - Effect of builder's promise in a deed with the mortgagee not to lodge a caveat

Legislation:

Transfer of Land Act 1893 (WA), s 137, s 138B, s 138C, s 140

Result:

Caveat extended on conditions

Category:    B

Representation:

Counsel:

Plaintiff:     Mr T O Coyle

First Defendants            :     Mr G J Douglas

Second Defendant         :     No appearance

Solicitors:

Plaintiff:     Lavan Legal

First Defendants            :     Hotchkin Hanly

Second Defendant         :     No appearance

Case(s) referred to in judgment(s):

Australian Broadcasting Commission v Australasian Performing Right Association (1973) 129 CLR 99

Australian Property and Management Pty Ltd v Devefi Pty Ltd (1997) 7 BPR 15,255

Badge Constructions (SA) Pty Ltd v Rule Chambers Pty Ltd [2007] SASC 417

Betlehem v Keytown Constructions Pty Ltd (formerly known as Jadestar Investments Pty Ltd) [2007] WASC 38

Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42

Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129

Gibson v Co‑ordinated Building Services Pty Ltd (1989) 4 BPR 9630

Glass v Defence Force Retirement and Death Benefits Authority (1992) 38 FCR 534

Graham H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93

Graham v Chappell (1993) 9 WAR 157

Griffith v Hodge (1979) 2 BPR 9474

Halse v Embling (Unreported, WASCA, Library No 970734, 22 December 1997)

Janssen v Commonwealth of Australia [1994] 2 Qd R 596

Kovacic v Elcham (Unreported, NSWCA, 2 July 1996)

Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407

Navarac Pty Ltd v Moondancer Holdings Pty Ltd [2009] WASCA 95

Rising Developments Pty Ltd v Hoskins (1996) 39 NSWLR 157

Walsh v Commonwealth of Australia (1998) 155 ALR 182

1. JENKINS J: Pursuant to s 138C of the Transfer of Land Act 1893 (WA) (the Act), the plaintiff applies, by originating summons dated 8 June 2009, for an order extending the operation of a caveat until further order of this court.

2. The plaintiff lodged the caveat, No K851419 (the caveat), over the first defendants' land known as 44 Cunningham Terrace Daglish and being Lot 193 on Plan 7468 and being the whole of the land comprised in Certificate of Title Volume 2695 Folio 220 (the subject land).  The interest claimed by the plaintiff in the caveat is as a chargee by virtue of a building contract dated 10 April 2007 between the plaintiff and the first defendants.

3. The first defendants deny that the plaintiff has any interest in the subject land. It therefore objects to the extension of the caveat. The first defendants required the Registrar of Titles to serve a notice on the plaintiff pursuant to the Act s 138B. The plaintiff then commenced these proceedings.

4. The second defendant did not appear at the hearing and I have assumed that, in accordance with the usual practice, the second defendant will abide by the decision of the court.

5. BankWest has a prior registered mortgage over the subject land.  It received notification of the hearing but did not to seek to be heard.

Factual background

1. There are various matters of fact in dispute between the parties.  It is not appropriate for me to resolve factual disputes in an application for an extension of a caveat.

2. The plaintiff is a builder.  Mr Sebastian Gismondo Urbani is a director of the plaintiff.  The first defendants are the registered proprietors of the subject land.  The first and second mentioned first defendants are architects.  The third mentioned first defendant works for them and the fourth mentioned first defendant is her husband.

3. On 10 April 2007 the plaintiff and the first defendants entered into a building contract whereby the plaintiff agreed to construct three two storey strata titled houses on the subject land for a contract sum of $2,455,245 (the contract).

4. Clause 10.11.2 of the contract provided that:

   The Proprietor hereby charges any interest which the Proprietor has in the parcel of land upon which or upon part of which the Works are to be executed as security for the payment to the Builder of all moneys payable under this Agreement

5. The plaintiff obtained possession of the subject land at the end of May 2007 and commenced the building work.  The building work was not completed by the date of practical completion which was in August or September 2008.

6. On 13 August 2007 the plaintiff, the first defendants and BankWest entered into a deed entitled 'Builder's Side Deed' (the deed).  The plaintiff contends that the first defendants misled it as to the terms of the deed and falsely represented to Mr Urbani the terms of the deed.  As a consequence it says that it did not understand the purport and effect of the deed.

7. The first defendants deny these allegations and say that Mr Urbani was given a copy of the deed to take away and that they suggested to him that the plaintiff should obtain legal advice as to its terms.

8. The introduction to the deed states that BankWest has agreed to provide finance to the first defendants and that the purpose of the deed is to regulate 'the way in which various rights in connection with the Building Contract are to be exercised'.  Clause 3.10 of the deed states:

   The Builder agrees with BankWest that it must not without BankWest's consent:

   (1)take any security interest over the Site …

   (2)lodge a caveat against the Site;

   (3)amend or vary the Building Contract (or agree to do so);

   …

9. The site is defined as the subject land.

10. The term 'security interest' is not defined in the deed.

11. Clause 7.1 states:

    The Builder and the Mortgagor each represent and warrant (in respect of themselves only and not each other) to BankWest that:

    (1)it has no right or power which is now exercisable or which, with the giving of notice, lapse of time or fulfilment of any other condition will or may become exercisable to terminate or alter the terms of the Building Contract or to suspend work or otherwise refuse to perform obligations under it;

    (2)…

    (4)this document and the Building Contract are each valid, binding and enforceable against it in accordance with their respective terms;

    (5)the Mortgagor has not granted the Builder a security interest over the Site or any of the Mortgagor's other assets;

    …

    (7)it benefits by entering into this document.

    …

12. Clause 3.12 states:

    If, despite clauses 3.10(1) and 7.1(5) the Mortgagor grants the Builder a security interest over the Site or any of the Mortgagor's other asserts [sic] (Builder Security), the Builder agrees with BankWest that:

    (1)BankWest's Security will, despite any rule of law or equity to the contrary, at all times rank in priority to the Builder Security for all money and other obligations secured by BankWest's Security (whether that money or those obligations are actual, contingent or prospective); and

    (2)the Builder must not enforce the Builder Security unless BankWest has enforced BankWest's Security.

13. Clauses 1.4 and 1.5 of the deed state:

    1.4Consideration

    The Builder acknowledges having executed this document in return for BankWest providing valuable consideration.

    1.5Inconsistency

    In the event of any Inconsistency between this document and the Building Contract, this document prevails.

14. On 5 February 2009 the plaintiff submitted a payment claim for $284,765.17.  Clause 9.5 and cl 10.3.1 of the contract required that payment be made within 10 business days of submission of the payment claim.

15. The first defendants did not and have not made any payment in respect of the claim.

16. On 10 February 2009, pursuant to cl 12.3, of the contract the first defendants purported to terminate the contract due to the plaintiff's breach of contract in failing to provide a programme of works, failing to attend to remedial work as required and failing to complete by the date of practical completion.

17. The first defendants contended then and continue to contend that they have exercised a right pursuant to cl 12.6 of the contract to suspend all further payments to the plaintiff.  Clause 12.6 relevantly states:

    In the event of determination under cl … 12.3 … the Proprietor shall be entitled … not to make any further payment to the Builder until completion of the Works.

18. The clause goes onto say that on completion of the Works there shall be an accounting between the parties.  Any costs, expenses or losses of the proprietor are to be offset against any amounts 'which would have been otherwise payable' under the contract.  The amount then owed to which ever party is said to 'be a debt payable by the builder to the proprietor or the proprietor to the builder as the case may be'.

19. In accordance with the terms of the contract, the plaintiff submitted the dispute concerning his payment claim to arbitration.

20. In the course of the arbitration the plaintiff submitted that the termination of the contract by the first defendants was invalid.  The arbitrator found that the plaintiff's reasons for so claiming were invalid.

21. The first defendants submitted that it was entitled to determine the contract and suspend payments for the three reasons mentioned above.

22. The arbitrator determined that the plaintiff was not in default by reason of failing to submit a program that complied with the first defendants' request.  He found that the plaintiff was in default by failing to comply with instructions to remedy defective works within the time contemplated by the contract.  The arbitrator rejected the submission made by the first defendants that the plaintiff had repudiated the contract.

23. The arbitrator also found it more probable than not that the contract was validly terminated by the first defendants.  Consequently, he found that they were justified in not paying the payment claim by 20 February 2009.

24. The first defendants have engaged another builder to complete the building work.  The work is due to be completed shortly.  The first defendants intend to then apply to subdivide the subject land into three strata titled lots.  They then intend to sell two of the strata titled lots.  The third lot is to be retained.

25. On 12 February 2009 the plaintiff lodged the caveat.

26. BankWest have confirmed that it was not asked to consent to the lodgement of the caveat and that it does not consent to it.

27. By letter dated 7 August 2009 the plaintiff agreed that BankWest has priority over it in respect of any proceeds of sale paid by a purchaser of any of the proposed lots on the subject land.  Further, it is prepared to uplift its caveat so as to allow the creation of the proposed lots on the basis that the caveat is immediately re‑lodged.  It is also prepared to lift the caveat to enable the transfer of new titles to purchasers on condition that satisfactory arrangements are put in place to ensure that at settlement of the sale of the lots  any amounts payable in excess of amounts properly payable to BankWest are paid to it.

28. This offer was amended at the hearing.  The plaintiff offered to withdraw the application to extend the caveat if the first defendants agreed to it obtaining an injunction preventing them from disposing of the third lot unless the sum of $600,000 is placed into a joint trust account pending resolution of the disputes over the contract.  The $600,000 is said, by the plaintiff, to represent the maximum amount the plaintiff may be entitled to receive under the contract.  In addition to the payment claim it has made, it alleges that it is entitled to damages for breach of contract.

29. The first defendants refused these two offers on the basis that they maintain that the plaintiff does not have a caveatable interest and even if it does $600,000 does not represent any sum 'payable under the contract'.

30. Alternatively, if it is arguable that the plaintiff has a caveatable interest, the first defendants submit that the balance of convenience lies with the caveat being removed because its retention is causing them to be in breach of their obligations to BankWest and they may suffer prejudice by the potential for delay and disruption to the process of subdividing the subject land.

31. The first defendants say that the plaintiff should not be permitted to extend the caveat because;

    1.There is currently no money payable by them under the contract to the plaintiff .  Thus, cl 10.11.2 does not give the plaintiff the right to lodge the caveat;

    2.Clause 10.11.2 of the contract was varied by cl 3.10 of the deed.  The first defendants submit that the interest created by cl 10.11.2 is a security interest contingent on BankWest's consent, which was not sought prior to the lodging of the caveat and in any event has been refused;

    3.As the plaintiff is in breach of its agreement in the deed not to lodge a caveat over the subject land, it should not be permitted to rely on cl 10.11.2 of the contract in circumstances where it has promised not to lodge a caveat; and

    4.The plaintiff has not come to the court with clean hands.

32. The plaintiff submits that it is arguable that it is has a caveatable interest over the property and that the balance of convenience favours the caveat remaining in place.  It says that the first defendants owe it money under the contract and, in such a situation, cl 10.11.2 of the contract gives it an interest in the subject land which it may protect by lodging a caveat.  The plaintiff says that the first defendants can not rely on the deed because:

    1.The obligation in cl 3.10(2) of the deed is owed to BankWest and only BankWest can enforce the clause;

    2.The deed is void or voidable because the obligations are radically different from what the plaintiff believed them to be, the first defendants made false representations to Mr Urbani about the content of the deed and the plaintiff (through Mr Urbani) did not understand the purport and effect of the deed.

33. The plaintiff says that the balance of convenience favours the retention of the caveat because of the undertakings which the plaintiff has given in its solicitor's letter of 7 August 2009.

Principles governing the extension of caveats

1. The Act s 137 permits a person who claims any estate or interest in land to lodge a caveat forbidding the registration of any dealing affecting the claimed estate or interest. The purpose of a caveat is to act as a statutory injunction to the Registrar General to prevent registration of dealings with the land 'so as to enable, in the ultimate analysis, a determination of the conflicting claims': Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407, 422 (Mason CJ, Dawson and McHugh JJ).

2. In 1996 the Act was amended to provide that the proprietor of land in respect of which a caveat has been lodged may apply for the caveator to be served with a notice to the effect that unless the caveator applies to extend the operation of the caveat it will lapse within 21 days. The Act s 138C provides that on the hearing of such an application the court, if satisfied that the caveator's claim has or may have substance, may, amongst other things, make an order extending the operation of the caveat.

3. It is clear from the statutory scheme that in an application under the Act s 138C the onus is upon the caveator to satisfy the court that the caveator's claim has or may have substance. This has been interpreted as an onus to satisfy the court that there is a serious question to be tried as to whether a caveatable interest exists. The caveator must also satisfy the court that the balance of convenience favours the retention of the caveat in that it would be better to maintain the status quo until the trial of the action by preventing the caveatee from disposing of the land to a third party. If there is a serious question to be tried it will be unusual for the balance of convenience to lie in the refusing of an application to extend a caveat: Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42. This is 'not a proposition of law but simply a general observation as a matter of fact': Navarac Pty Ltd v Moondancer Holdings Pty Ltd [2009] WASCA 95.

4. If there is a serious question to be tried but the validity of it can only be determined by findings of fact then the caveat should remain and the caveator should be left to proceed by way of action to establish the interest or estate:  Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129 140 ‑ 141 (Brinsden J); Halse v Embling (Unreported, WASCA, Library No 970734, 22 December 1997) [11] (Parker J).

5. Prior to the hearing, orders had been made requiring witnesses who had sworn affidavits in these proceedings to attend for cross‑examination.  In accordance with the principle that proceedings for the extension of a caveat are not the appropriate proceedings in which to resolve competing factual claims, I declined to hear oral evidence at the hearing.

Principles relating to the existence of a charge under a building contract

1. A building contract, without more, does not confer on the builder any interest in the land upon which the building is to be constructed:  Kovacic v Elcham (Unreported, NSWCA, 2 July 1996); Graham H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93.

2. However, the issue here is not whether the work done under the building contract gave rise to an equitable lien or charge but whether cl 10.11.2 of the contract is sufficient in itself to create an interest capable of supporting a caveat.  There are a number of cases where it has been so held:  Griffith v Hodge (1979) 2 BPR 9474; Gibson v Co‑ordinated Building Services Pty Ltd (1989) 4 BPR 9630; Rising Developments Pty Ltd v Hoskins (1996) 39 NSWLR 157.

3. Graham v Chappell (1993) 9 WAR 157, relied on by the first defendants, is distinguishable in that the clause in the relevant building contract purported to give a right to the builder to lodge a caveat without creating a charge over the property. Whereas cl 10.11.2 creates a charge which the law and the Act provides may be secured by a caveat.

4. The corresponding clause in the contracts in the cases supporting a caveatable interest referred to '… all moneys that may become payable to the Builder by virtue of this Contract or otherwise arising from the carrying out of the Works' or similar.

5. The issue here is whether the money which the plaintiff says is owed to it is 'payable'.

6. The first defendants submit that the term 'payable' in cl 10.11.2 of the contract means due and payable immediately.  They say that as there is no money due and payable immediately by them to the plaintiff, the plaintiff presently has no caveatable interest in the subject land.  They rely on Glass v Defence Force Retirement and Death Benefits Authority (1992) 38 FCR 534, 537.

7. In Glass the court was required to construe a statutory provision which referred to previous employment 'upon the termination of which a transfer value became payable'.  Spender, Ryan and Cooper JJ said:

   … 'Payable' is an ordinary English word signifying that something is presently capable of being paid.  If an amount is not capable of being paid unless and until a specified election shall have been made, or some other event shall have happened, it is not 'payable' in accordance with that ordinary meaning.  This view conforms with that expressed by Gummow J in Edelsten v Health Insurance Commission (1988) 90 ALR 595 at 599.

8. However, in Janssen v Commonwealth of Australia [1994] 2 Qd R 596, a decision of the Queensland Court of Appeal, it was decided that in a different statutory context 'payable' did not mean immediately payable but referred to liable to pay subject to compliance with certain procedure requirements.

1. The decision in Janssen was followed by the New South Wales Court of Appeal in Walsh v Commonwealth of Australia (1998) 155 ALR 182.

2. Another case which construed 'payable' in a statutory context was Badge Constructions (SA) Pty Ltd v Rule Chambers Pty Ltd [2007] SASC 417. In that case the Full Court of the Supreme Court of South Australia held, in effect, that 'payable' in the Worker's Liens Act 1893 (SA) meant due and payable immediately. White J [95] noted that the proper construction and application of the relevant provisions of the statute under consideration had 'caused much difficulty'. The judgment and the cases referred to therein indicate that the meaning of 'payable' in particular circumstances is not straightforward.

3. In this case it is the contract which must be construed not a statute.  In construing the contract the court must 'endeavour to discover the intention of the parties' from the words of the contract.  If the words are unambiguous in meaning the court must give effect to them notwithstanding the result.  However, if the words are capable of two meanings the court will prefer a construction which avoids consequences which appear to be 'capricious, unreasonable, inconvenient or unjust':  Australian Broadcasting Commission v Australasian Performing Right Association (1973) 129 CLR 99, 109 ‑ 110 (Gibbs J).

4. In my opinion two meanings of 'payable' in cl 10.11.2 of the contract are open.  The first is that it refers to amounts immediately due and payable.  The second is that it refers to amounts for which there is an existing liability to pay, although the first defendants may be entitled to delay payment.

5. I very much doubt that it is arguable that the term refers to amounts which may be due to the plaintiff if work was done or materials supplied under the contract.  Neither do I think it is arguable that it refers to money which the first defendants may later become liable to pay as damages for breach of contract.  These meanings appear to me to be beyond any ordinary or usual meaning of 'payable'.  For such meanings to apply there would have to be something in the wording of the contract to justify them.  I can see nothing in the contract which would justify such broad meanings.

6. For these reasons I am of the view that it is arguable that cl 10.11.2 of the contract creates a charge over the subject land in favour of the plaintiff to the amount of the payment claim.  Even if I am wrong in excluding potential damages from the meaning of 'payable', the plaintiff has not produced evidence to persuade me that any particular award of damages is 'payable'.

7. In my opinion, the other issues raised by the parties in respect of the effect of the terms of the deed are not matters which would result in me deciding not to extend the caveat.

8. For example, the mere fact that the plaintiff signed the deed does not deprive it of its caveatable interest in the land.  As Heenan J said in Betlehem v Keytown Constructions Pty Ltd (formerly known as Jadestar Investments Pty Ltd) [2007] WASC 38, [19] ‑ [20]:

   … The accepted rule is that a contractually binding agreement by a person possessing a caveatable interest not to lodge a caveat does not deprive that person of the statutory right to lodge a caveat; although doing so will involve a breach of contract.  The court will take the contractual provision into account when deciding whether to make an order extending the caveat and, alternatively, there remains the option of the court enforcing the interest under the contract by an injunction.  The authorities which support those propositions are the decision of Nathan J in the Supreme Court of Victoria in Lintel Pines Pty Ltd v Nixon [1991] 1 VR 287 and the decision in Australian Property & Management Pty Ltd v Devefi (1997) 7 BPR 15,255 at 15,257.

   It seems to me that if this caveat was lodged in breach of contract, the principal remedy for the registered proprietor/first defendant would be for damages. …

9. The first defendants argue that the terms of the deed varied the terms of the contract.  Whether that is correct and, if so, to what extent it varied the contract is a matter which should not be determined on an application to extend the caveat.

10. The question as to whether the deed was signed in circumstances where it was void or voidable would also have to be determined at trial.  As would the question as to who were the parties to the relevant conditions of the deed and, if it is to be binding as a contract on the plaintiff, whether it obtained consideration for agreeing to be bound.

Balance of convenience

1. The plaintiff submits that the balance of convenience favours the extension of the caveat, as its removal would destroy its ability to protect the interest which it asserts it has in the subject land under the contract.

2. The plaintiff submits that the first defendants are afforded protection by the Act s 140 which provides that a party who lodges a caveat without reasonable cause shall be liable to compensate any person who may have sustained damage thereby.

3. Further, the plaintiff submits that it has proposed various means by which the prejudice referred to by the first defendants can be avoided by either extending the caveat on conditions or providing for alternative remedies such as an injunction in lieu of a caveat.

4. The first defendants submit that the balance of convenience favours not extending the caveat since:

   a.there is no evidence that the plaintiff will suffer any significant prejudice if the caveat is not extended;

   b.the first defendants suffer prejudice by way of the caveat causing them to be in breach of their obligations to BankWest; and

   c.the first defendants and BankWest suffer prejudice by the potential for delay and disruption to the process of subdividing the subject land.

5. There would be prejudice to the plaintiff if the caveat was not extended as the inability to maintain a caveat over the subject land would render nugatory cl 10.11.2 of the contract, if it remains in force.

6. On the other hand, the plaintiff executed the deed by which it promised not to lodge a caveat against the title to the subject land without the consent of BankWest.  It has been said that in such a situation it would 'be inequitable for the court to extend the caveat':  Australian Property and Management Pty Ltd v Devefi Pty Ltd (1997) 7 BPR 15,255.

7. It is also relevant that by maintaining the caveat the first defendants are also in breach of the promises they made in the deed.  A court should not allow a caveat to be used as a means of commercial pressure to force a party to pay a disputed claim.

8. Another factor relevant to the balance of convenience is that the existence of the caveat should not operate to prevent a subdivision of the subject land, the issuing of new titles to the subdivided lots or the sale of those lots, as long as the first defendants maintain sufficient interest in one or more of the subdivided lots to meet the plaintiff's charge.

9. Finally, I note that the plaintiff has not commenced proceedings to either obtain a declaration as to the validity of cl 10.11.2 of the contract or to obtain a judgment in the amount of the payment claim made by it which is the subject of the charge.

10. In this respect, the first defendants say that as there have been no findings made as to disputed factual issues in this proceeding, they require the plaintiff to commence proceedings to obtain a declaration as to the validity of cl 10.11.2 of the contract.

11. Whilst I understand the desire of the first defendants to vindicate their position as to the effect of the deed, I am of the opinion that in these particular circumstances to require the plaintiff to commence and prosecute proceedings for a declaration may divert the party's attention and resources from the real issue between them in respect to the caveat.  The real issue between them is the determination of the dispute between the parties as to the payment of the payment claim.  Nevertheless, I acknowledge that if the first defendants insist, the plaintiff should not be able to maintain the caveat without commencing proceedings to vindicate its claim to a charge over the subject land.

12. Balancing all these matters I am of the view that the caveat ought to be extended on the following conditions:

    1.Unless the first defendants agree otherwise, within 14 days the plaintiff commences proceedings to recover the amount of the payment claim and to determine the force and effect of cl 10.11.2 of the contract;

    2.The plaintiff executes a written undertaking to the court that it will uplift the caveat so as to allow the subdivision of the proposed land, the issue of new titles for the subdivided lots and the registration of a mortgage on each of the titles to the subdivided lots to replace BankWest's mortgage on the subject land, on the basis that the caveat is immediately re‑lodged over each of the separate titles with no intervening dealing other than the registration of BankWest's replacement mortgages;

    3.The plaintiff executes a written undertaking to the court that it will uplift its caveat so as to allow the transfer of the title to any subdivided lot to a purchaser or the discharge of BankWest's mortgage on a lot on condition that if the sale is of the last lot in the ownership of the first defendants, any amount up to $285,000 in excess of amounts properly payable to BankWest and after payment of the reasonable costs of sale are paid into a trust account held jointly with the plaintiff pending the determination of the proceedings referred to in condition 1; and

    4.The caveat will lapse if:

    i.the first defendants deposit into a trust account held jointly with the plaintiff the sum of $285,000 pending the determination of the proceedings referred to in condition 1 or an order of a judge; or

    ii.the first defendants undertake to the court not to create, dispose of or deal with any estate or interest in the subject land or any new lot created after subdivision of the land (which is permitted) except to register a mortgage on each subdivided lot to replace BankWest's mortgage on the subject land until further order; or

    iii.the first defendants consent to an injunction in the above terms.

13. I will hear the parties as to final orders.