Cawood v Infraworth Pty Ltd

[1989] HCATrans 287

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No Bl9 of 1989

B e t w e e n -

MARGARET ANN CAWOOD

Applicant

and

INFRAWORTH PTY LTD

Respondent

Application for special

leave to appeal

BRENNAN J

GAUDRON J

Cawood

TRANSCRIPT OF PROCEEDINGS

BROM BRISBANE BY VIDEO LINK TO CANBERRA ON FRIDAY, 17 NOVEMBER 1989, AT 9.33 AM:

Copyright in the High Court of Australia

C2Tl/1/JH 1 17/11/89

MR F.L. HARRISON, QC:  May it please the Court, I appear with

my learned friend, MR L.D. BOWDEN, for the applicant.

(instructed by Wockner Partners)

MR G.L. DAVIES, QC:  May it please the Court, I appear with

my learned friend, MR D.J.S. JACKSON, for the

respondent. (instructed by Hopgood & Ganim)

BRENNAN J:  Yes, Mr Harrison?

MR HARRISON:  If the Court pleases, in this matter the

respondent purchaser who purchased under the

standard real estate institute form of contract in

corrnnon use in Queenslan~ which contract is to be

found at page 57 of the application book,

refused to complete the purchase and purported to

rescind the contract on the ground that requests to

withdraw two caveats though lodged had not been

registered at the date provided for settlement

which was the date after the date in the contract but

the parties had extended the contract by one day.

I should say that the contract in the standard form

provides that time is of the essence and unfortunately
in the reproduction of the contract that particular

clause, clause 23, has been cut off but it is a

contract providing that time is of the essence.

BRENNAN J:  And it remained of the essence.

MR HARRISON:  And it remained of the essence. Your Honours,

the purchaser contended that the transfer tendered

at settlement was not capable of irrnnediate

registration within clause 2 of the contract which is

on page 58 of the book and provides so far as is

relevant:

The balance of the purchase price shall be

paid on the date for completion stated in

Item O in exchange for possession (such

possession to be vacant except for tenancies

stated in Item M) together with a duly

executed transfer in favour of the

Purchaser capable of irrnnediate registration

(after stamping)-

and so on.

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MR HARRISON (continuing):  The judge at first instance

accented the submission of the purchaser that

by reason of the caveats and the fact that

the requests to remove them had not been

registered, the transfer itself was not capable

of immediate registration within that provision. view in the judgment of Chief Justice Ma~rossan, The Full Court by a majority took the contrary

as he was at the time of judgment, with whom

Mr Justice Kelly agreed at page 24 of the book, whilst Mr Justice Shepherdson at pages 25 to 27

dissented. Howeve½ the majority went on to

hold that the nevertheless the nurchaser was

entitled to insist that the withdrawals be

registered at the settlement date, notwithstanding

that they had held that the transfer was ca?able

of immediate registration.

It is submitted that the proposed appeal

involves three questions of law which are of

general public importance, certainly in Queensland and perhaps beyond, although there is not complete

uniformity in the applicable legislation. The

first question that it is submitted arises is

when a withdrawal of caveat takes effect. The

applicant's. contention is that a withdrawal

operates by its own force rather than by an

act of so-called registration by the if that is correct then the purchaser was not

entitled to insist on the so-called registration of

the withdrawal before settling as tr.e caveat

had ceased to be in force by virtue of the mere

lodgement of the withdrawal. The answer to the

question, it is submitted, depends on whether

a caveat is an instrument under the Torrens

system, or may depend on that and more particularly,

how a caveat is removed, withdrawn or cancelled,

whatever is the appropriate terminology, so as

to be no longer in force.

The second question that it is submitted

arises is whether in view of the detailed orovisions

in the standard form of contract used in Queensland,

and that is referring in particular to the detailed

requirements of clause 2 that we have already

referred to as to what is required at settlement,

there is any scope for implying the principle that

was adopted by the majority and that is implied

in an open contract that a purchaser is entitled

to have followed at settlement the procedure

which will minimize as far as reasonably possible

the risk of failing to obtain registration.

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MR HARRISON (continuing): In other words, the submission is,

in view of the detailed provisions in the contract

compliance with those detailed provisions is

sufficient. The third question which may arise

is whether, in view of the answer to the question as

to when withdrawal takes effect, the fact that

withdrawals of existing caveats have not been endorsed

on the certificate of title exposes the purchaser to
any or any unacceptable risk. Further, if leave is
granted another question is likely to arise by way
of cross-contention, namely what is required by

the expression in clause 2 of a standard contract,

"transfer capable of immediate registration." One

would anticipate that the respondent would seek to

relitigate the question that was decided in favour

of the applicant.

As to the first point, namely whether a withdrawal

operates by its own force, I would refer firstly to

section 101 of the Act of 1861, dealing with the

operation of a caveat; it is at page 39 of the blue

pamphlet. That provision provides:

So long as any caveat shall remain

in force forbidding the transfer -

et cetera -

the Registrar of Titles shall not register

any -

dealing; and then sets out a number of exceptions which

do not bear on the present problem. The submission that

would be made on an appeal is that a caveat only has

that operation that is that it only remains in force

up until the point when a withdrawal of caveat is

lodged whilst a contrary view is that a caveat

ceases to remain in force only when it is formally

struck off the title by the registrar.

(Continued on page 5)

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BRENNAN J:  What is the statutory provision which relates

to the noting of the caveat on the title?

MR HARRISON:	There is no statutory provision requiring the noting of the caveat on the title. Could I take
Your Honours to the principal provisions dealing
with how a caveat operates, starting with section 98? Section 98 provides that:

Any person ..... may by a caveat in the prescribed

form forbid the registration of any instrument

affecting such land -

et cetera. Section 99 provides a procedure whereby

the caveateema.y summon the caveator:

to attend before the Supreme Court -

and I am reading now from the fifth last line -

to show cause why such caveat should not be

removed.

So the term used when the court makes an order is

removal of the caveat. There is no reference to

deregistration or cancellation of registration.

Section 100 talks not of registration but of leaving:

Every caveat left under the provisions of

this Act with the Registrar-General shall -

contain a sufficient description and so on. Perhaps

I should interpolate: one finds a slightly

confusing change in terminology. Sometimes the

Registrar-General is mentioned; sometimes the
Registrar of Titles is mentioned. The explanation seems to be that the Registrar-General used to

have the functions of administering the Act. His

functions were generally transferred to the

Registrar of Titles but the Act has not been

consistently amended so as to conform with the

effect of an earlier amending Act.

(Continued on page 6)

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MP~ HARRISON (continuing): Going on to section 101, I have

already referred to the provision there:

So long as any caveat shall remain in force -

again not so long as it remains registered. And

then section 102, which in our submission, is not
concerned with the case that arises here. Section 102

provides:

Any caveat which may be lodged under the

provisions hereinbefore contained may be
cancelled by the Registrar-General upon its
being proved to his satisfaction and that of
the Master of Titles that the estate interest
or claim of the person by whom or on whose
behalf the same is lodged has ceased been
abandoned or withdrawn or that the rights
of the persons on whose behalf such caveat
may have been lodged are satisfied or arranged

or in case the Registrar-General and the Master

of Titles shall be satisfied that the nature
of the estate interest or claim of the person

by whom or on whose behalf the caveat is lodged

is not such as to entitle him to prohibit

the sale -

et cetera. That appears to provide, in our submission,

a type of quasi-judicial procedure involving the
intervention of the Master of Titles. The

Master of Titles office is provided for in

section 12 and 13. The ~aster is required to be

a qualified barrister or solicitor and the process,

in our submission, is one that is not invoked in

the standard case of withdrawal, which is dealt

with ordinarily simply by the registrar.	Your Honours,
the word that is used in relation - - -

BRENNAN J: What section, if any, deals with withdrawal of a

caveat?

MR HARRISON: There is no section that deals with the withdrawal

of a caveat and the textbooks· note Queensland as

being unique in not providing for withdrawal, although

none of the sections in the REAL PROPERTY ACTS

provide specifically when a withdrawal is to be

effective.

(Continued on page 7)

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MR HARRISON (continuing):  The New South Wales section, for

example, provides that section 74M of the REAL

PROPERTY ACT	1900 simply provides that a caveat
may be withdrawn by the caveator.	The Victorian

is a little more specific. It provides a procedure for withdrawing, "It may be withdrawn by lodging with

the registrar an instrument in appropriate form".

The So11th Australian legislation likewise provides that it may be withdrawn by notice in writing to

the registrar and the Tasmanian Act is in similar

form. The Western Australian Act is analogous to

New South Wales in simply providing for withdrawal but not saying how the withdrawal takes place, but

Queensland is - - -

BRENNAN J: Is there any Queensland Titles Office practice which

is established by the evidence?

MR HARRISON:  The Queensland Titles Office practice as

established by the evidence is that the Registrar

of Titles examines the withdrawal of the caveat -

I should go back a moment, Your Honour. The

Queensland Titles Office practice is, in fact, to

put an endorsement on the certificate of title to

the effect that the caveat has been lodged and the

Titles Office practice on a withdrawal is to examine

the withdrawal and to endorse "withdrawn" on the

endorsement of the caveat. But there is no

legislative provision under which that practice is

established. It appears to be simply an

administrative procedure adopted by the registrar.

His practice is, in fact, not to registrar

subsequent instruments until he has processed the

withdrawal but there is nothing again in the Act

requiring him to take that course.

(Continued on page 8)

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MR HARRISON (continuing):  Under the Queensland legislation,

to come back to the term "withdrawal" that is

commonly used in Queensland, there was originally

no form of withdrawal provided. The origin of

the term "withdrawal" appeared to be in Form K

that used to be in the schedule - that is the

Form K of a caveat which for bad "the reg is tra t ion

of an instrument until this caveat be by me

withdrawn". That schedule was repealed in 1986

and the forms are now provided by regulation.

The present prescribed form of caveat,

Form 18, is to be seen at page 77 of the

application book and is also, of course, in the

regulations which I think Your Honours have. It

adopts the same form of words. This is in item (5):

forbid the registration of any instrument

affecting the said land or estate or interest

therein until this caveat is by me withdrawn -

and the regulations which came into effect in 1986,
which is before the present events, now provide

for a form of withdrawal in Form 22 which is, again,

a request - I am sorry, it is not a request, it

states that the caveat is withdrawn; that is, it

is in the form appropriate to a case where it
operates of its own force rather than a request

to the registrar to register it as though it were

an instrument.

(Continued on page 9)

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MR HARRISON (continuing):  There are a number of other

provisions in the Act dealing with a caveat ceasing

to have effect which, in our submission, are

consistent with the notion that a caveat is not

registered under the Act and it is our submission

that it is consistent with the notion that a caveat

is not registered that a withdrawal should not be

required to be itself registered. For example,

section 99 which I have already referred to gives the

power to the court to remove a caveat rather than

deregister it or some similar term. By

section 40 of the Act of 1877 - I should say
sections 39 and 40 - a caveat lapses; again, there is

no provision requiring it is to be unregistered or

deregistered and all of these, in our submission,

are consistent with the notion that a caveat is not

an instrument that is registered and a withdrawal is

something which likewise is not required to be

registered. I should refer Your Honours - - -

BRENNAN J:  If that be so, the problem then is one of

construing the term in clause 2 of the contract in

the context of an Act which does not contain any

specific statutory provision for registration of

either the caveat or the withdras.1 but which yet
provides for a Titles Office practice in relation to

the noting of the caveat and its withdrawal.

(Continued on page 10)

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MR HARRISON:  I am not sure that I follow Your Honour's

reference to providing for the Titles Office

practice.

BRENNAN J: There are regulations which contemplate that there

will be something lodged, namely a caveat and a

withdrawal.

MR HARRISON:	Yes.
BRENNAN J:	And when they are lodged one imagines that they are

not immediately tucked away into some corner, that

something happens to them in the Titles Office to

connect the .instrument, if it be an instrument, with

the relevant certificate of title.

MR HARRISON:  Certainly, but the effect of the Act itself is

simply to forbid the registrar to register any

instrument on lodgment of the caveat, and it is a matter

for the registrar to develop a practice,in effect, so

as to remind him that there is a caveat that remains

in force. And that practice which is adopted has in

fact been, until computerization, to pencil the

certificate of title and then to register once the

caveat has been examined in the sense of placing

a notation that looks like a registration on the

certificate of title.

BRENNAN J:  And then not to register any subsequent instrument

until that caveat notation has been cancelled?

MR HARRISON:	That certainly is the practice that has been adopted but, in our submission, one cannot take that
practice as establishing that a purchaser is not entitled
to registration. It is, we would submit, simply a
matter of good housekeeping on the part of the
registrar. Having noted that bhe caveat is on the title,
it is a matter of good housekeeping for him to note
that the caveat has been withdrawn.
BRENNAN J: Well, whether it is a matter of good housekeeping

or not, the problem, I suppose, between vendor

and purchaser on completion, is whether or not the

instrument that is tendered by the vendor to the
purchaser is one which, having regard to the

housekeeping,is capable of immediate registration.

MR HARRISON:  Yes, Your Honour. That is really going back to

the point on which we succeeded, if one is looking

at 'capable of iT!l!'!l.ediate registration", and we are

seeking to uphold the decision of the Full Court on

that point.

BRENNAN J:  But that was on the basis of the temporal connotation

of the word "immediate", was it not?

HR HARRISON:  It was on the basis that it did not have a temporal

connotation.

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BRENNAN J:  But the proposition I am putting to you is not

one which depends upon the temporal connotation but

upon the steps which had to be taken prior to the

registrability under the housekeeping practice of the

instrument that was tendered in completion.

MR HARRISON:	Yes, that is so, Your Honour.
BRENNAN J:	How could it have been registered, having regard to thatpractice, until the first caveat had been noted
as withdrawn and the second caveat both endorsed on
the title and noted to have been withdrawn?
HR HARRISON:	It was, in our submission, capable of immediate

registration, because 'capable of iillI!lediate registration"

does not refer to the practice of the registrar to take these steps, but focuses on the nature of the

title that is being made. In other words, it is directed

to exclude, for example, an intermediate transfer.

And that is, as I said -

BRENNAN J:	What, has no regard to the caveat?
MR HARRISON:	That is the conclusion that the Full Court arrived

at in our favour, but went on - - -

BRENNAN J: That is rather reading ~ore into the Full Court's

judgment than it says, is it not?

MR HARRISON: In our submission, no, Your Honour. At page 24

His Honour the Chief Justice said, in the second

paragraph:

(Continued on page 12)

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MR HARRISON (continuing):

Tvith ~eat respect to the viev:r v:hich appears

word "i;n:rneciate 11 • whicl--~ oualifies registration	to have been adooted beJ.ow, I consic1.er the
in tr.e standard cl. 2 with not intended to have
have~ te~oral connC'ta.tion 1;,ut is intended to deal witl: the sort of debate whicl:->. was
considered in RANDS DEVELOPMENT PTY LTD V D~IS and finally settled in the MERrIC'N APARTMENTS.

which were concerned with wt>ether t1'.e nurchaser

was entitled to a transfer direct from the

registered proprietor -

in favour of the view that, in the absence

of soecific contractual provision to the

contrary, a purchaser is-not entitled

to require that a vendor shall be

registered as proprietor at completion but

is entitled to have delivered to him a

memorandum of transfer directly in his

favour from whoever is the registered

proprietor. In these circumstances there

wili be no need for any intervening

registration to secure the registration of

title in the purchaser.

Then His Honour goes on to dispose of the inference that·might be drawn from the words "(after stamping)".

BRENNAN J:  Is it your submission, based on that,that

His Honour was suggesting that if there be a

transfer from the registered proprietor to the

purchaser tendered on settlement while there is

a caveat on the deed, the purchaser is bound to

complete?

MR HARRISON:  No, the purchaser is bound to complete only

if the removal of the caveat is certainly assured.

BRENNAN J:	Why is that, having regard to the words of clause 2 and the construction which, in your
submission, the Full Court placed unon them? - ..
MR HARRISON:	Because the construction that the Full Court

placed on them was that all that the words

i'capable of irmnediate registration" were directed

to was ensuring that the title was derived

directly from the current registered proprietor

and was not concerned with matters that might

delay registration, such as this oarticular procedure

that is in fact adopted by the registrar. That

follows from the rejection of the notion that

"capable of immediate registration" had a temporal

connotation.

BRENNAN J: Well one of two things: either the clause does

contemplate an obligation to complete when there

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is a caveat outstanding, or it does not. Now

in your submission, does an outstanding caveat

prevent the vendor from completing in

accordance with clause 2?

MR HARRISON:  An outstanding caveat prevents a purchaser

from completing, not because of the words

"capable of immediate registration", but

because it creates an objection to title,

that is while the caveat remains in force the

purchaser¼~ll not be registered. But it is
our submission that the caveat ceases to

remain in force if by the time of settlement

it has been withdrawn and that the withdrawal

is effected by the lodgement of the formal

withdrawal of caveat.

BRENNAN J: Then if you put it on the basis of adequate

title being shown by the vendor, do you accept

the criterion which was expressed by

Chief Justice Barwick in GODFREY CONSTRUCTIONS?

MR HARRISON:  Yes, we do.

(Continued on page 14)

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BRENNAN J:  On that footing this case would turn on whether

or not the assurances that were offered by the

vendor's solicitors amounted to a certain assurance

that the caveat would be withdrawn?

MR HARRISON: That is so, Your Honour, with this qualification:

the case was litigated before Mr Justice Carter as a matter of interpretation of the expression

"capable of immediate registration". There was no

evidence of any objection taken other than that

that clause had not been complied with. The matter

on which the Full Court decided was raised only in

argument, in fact by members of the court themselves.

BRENNAN J: Albeit so, it was the point on which you failed?

MR HARRISON:  Yes, Your Honour.

BRENNAN J: You must get special leave, I take it, to canvass that point?

MR HARRISON:  Yes.

BRENNAN J: Well then, what is there special about that point?

MR HARRISON: 

What is special about that point is, in our

submission, that, in fact, in our submission,it
depends on an assumption that the caveat remained

in force when settlement was tendered in the present
case.

BRENNAN J: Well, the phrase used by the Chief Justice, that

is, Chief Justice Barwick, was, "It's removal is

certainly assured". That rather sounds as though

it was not a question of a legal efficacy of

whatever was noted on the title or lodged in the office but of the predictability of the removal.

MR HARRISON:  We would submit that His Honour there was

concerned with a caveat that remained on the title

and in respect of which no withdrawal had been

lodged. We have brought ourselves within his

requirement because the caveat had, in fact, been

withdrawal of caveat. The importance of the	removed, in our submission, by the lodgement of the	point to conveyancing practice - or to the conduct
of conveyancing - is, among other things, this
that a vendor can enter into a contract with a
perfectly clear title. Under the Queensland standard
form of contract - contracts almost invariably
provide that time is of the essence - so that if it occurred that a caveat is lodged by someone between
contract and settlement then a vendor will be placed
in a position whereby whether he can hold on to his sale will depend on the administrative efficiency of the Registrar of Titles rather than on the actual
title that the vendor makes.

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So that, in any case in which a caveat is

lodged between contract and settlement, unless the

vendor, on the finding of the majority of the

Full Court, can actually procure the Registrar of

Titles to process the instruments then

notwithstanding that they will, in fact, assure

title to the purchaser, the purchaser will be

entitled to withdraw from the contract. That, in
our submission, is a matter of very great significance

which justifies consideration of the point.

BRENNAN J: Is it not an inevitable consequence of a system

of title by registration?

(Continued on page 16)

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MR HARRISON:  In our submission, not, Your Honour. What occurs

in a case such as this is that the vendor has, in

fact, made out title, and all that remains is that

the ease of the registration of the documents which

will actually effect title, that is the registration

of the memorandum of transfer, plus, in accordance

with the practice of the registrar, the administrative
dealing with the documents, or the withdrawal of the
caveat. But, just as a purchaser will have to examine

the memorandum of transfer to determine whether it

conforms with the requirements of the Act, the

purchaser is able to examine what is proposed to be,
or what has been lodged, as a withdrawal of the

caveat, and simply as part of determining whether

there is a good conveyance will determine whether or

not that withdrawal has effected the result that the

caveat is no longer in force.

I think that, Your Honour, canvasses all

that we would ·seek to raise in respect of

what I have called the first question. The second

point is whether there is scope within the standard

Queensland contract to imply an entitlement in a

purchaser to anything additional to what is contracted

to be provided, and that really comes down to the

fact of the detailed provisions contained in clause 2

of the contract on page 58. It is not disputed

as a general proposition under an open contract that -

if I could use the words of Mr Justice Jacobs in

RANDS DEVELOPMENTS V DAVIS, (1975) 133 CLR 26, at

page 34, that:

The procedure to be adopted on settlement must be such that it gives to the purchaser

the fullest protection which is consonant

with a settlement of transactions without

undue delay or expense.

The settlement clause, however, in the contract

under consideration there, was a very much simpler form than is now currently used. The form that	His Honour was referring to there is to be seen on
page 32 at the beginning of his judgment, which simply provided that the vendor was to pay the
balance purchase moneys:

ninety days from the date hereof in exchange

for a registrable transfer and such other

documents (including the relevant

Certificate of Title) as may be appropriate

to lead to registration of the purchaser as

proprietor of an estate in fee simple.

In MERITON APARTMENTS PTY LTD V McLAURIN & TAIT,

(1976) 133 CLR 671, at page 676 to 677, the O:mrt

comprising Chief Justice Barwick and

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Justices Mason and Jacobs, accepted that such -

which is perhaps something which may well go
without saying - a principle may be excluded by

the contract. Their Honours say:

More recently in RANDS DEVELOPMENTS

PTY LTD V DAVIS -

this is at the bottom of 676 -

Jacobs J expressed the view that, subject

to any agreement to the contrary, a

purchaser was entitled to have followed

that procedure on settlement which will

"minimize as far as was reasonable

possible the risk to him of.failing to

obtain registration", and that this

procedure called for the delivery on

settlement of a transfer executed by the

registered proprietor.

(Continued on page 18)

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MR HARRISON (continuing):  We do not brin8 ourselves

precisely within the expression subject to any

agreement to the contrary", but it is submitted

that as a matter of general principle in
interpretation of the contract, that because of the

detail in clause 2 there is no scope for implying

anything more that is provided for there. I have

already read the clause down to the requirement of:

a duly executed transfer in favour of the

Purchaser capable of immediate registration

(after stamping) in the appropriate office

free from encumbrances -

it goes on - this is the third line on page 58:

except as set out in item Land accompanied by
the instrument of title except as provided in

clause 8 and in the case of the land being

subject to any tenancies referred to in item M

a notice -

et cetera. Then it goes on to deal with other cases

where there may be obstacles requiring certificates

under various Acts: the RESIDENTIAL TENANCIES ACT;

the FIRE SAFETY ACT and so on. In our

submission,there is a question which justifies the giving of special leave in the present case, as to

whether this clause leaves open any scope for the

purchaser to require more than has specifically been

contracted for. Your Honour - - -

BRENNAN J:  We will adjourn until the transmission is restored.

AT 10.11 AM SHORT ADJOURNMENT

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UPON RESUMING AT 10.17 AM:

BRENNAN J:  Mr Harrison, it seems like the marvels of modern

science are proof against all collapses.

Are you familiar with where it was that the

transmission cut out1

MR HARRISON:  Your Honours, I think I was saying as it cut

out that I was going on to the third point which

was that it would be submitted in any event that

the absence of any noting or registration of the

withdrawal, in the case where there have been

withdrawals lodged, is such that it cannot be said

that there is any appreciable risk provided that the

withdrawal is in the proper form and it is not

suggested in the present case that there was any

form or defect in the documents lodged.

We submit that that is important because the

effect of the judgment of the Full Court is to require

in all conveyances using the standard form of contract

that such withdrawals of caveats be actually

registered and I have already made submissions as

to the importance of that point to the conduct of

conveyancing generally and it would be our submission,

on an appeal, that there is no actual risk that can

be pointed to which would entitle a court to conclude

that there is any risk that a purchaser will not

obtain the title that has been contracted for.

BRENNAN J:  Is it open to the solicitor for a caveator to

withdraw a withdrawal?

MR HARRISON: It is our submission no. That has not been

dealt with specifically in the case of the REAL

PROPERTY ACTS but in other circumstances it has.

If I could give Your Honours two examples; in

relation to notices of objection under the INCOME

COMMISSIONER OF TAXATION, (1984) 2 FCR 556, that TAX ASSESSMENT ACT it has been held in HIGGS V	a notice of objection ceases to have effect once
the taxpayer advises the commissioner of its
withdrawal so that the objection cannot subsequently
be revived. That followed a line of English cases, the last of which was BOAL QUAY WHARFINGERS LTD V KING'S LYNN CONSERVANCY BOARD, (1971) 3 All ER 597,
where there was an application under certain
legislation for permission to appoint additional
dock workers.

The application was withdrawn. Subsequently

the applicant learned that in the case of rejected

applications - and apparently all similar
applications had been rejected - there was a claim

to a right to compensation and the decision in the

case was to the effect that although there was no

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prov1s1on 1n any of the legislation relating to
the withdrawal of applications, once the application
had been withdrawn it ceased to have effect, could
not be revived and that deprived the applicant of
any entitlement to compensation. So the position
that we contend for is consistent with the view taken

in cases such as those.

BRENNAN J:	Yes.
MR HARRISON:	Thank you, Your Honours.
BRENNAN J:	Yes, Mr Davies.
MR DAVIES:	Your Honours, can we start with the basis for the

majority decision of the Full Court, which was the
evidence of Mr Purcell, an experienced solicitor.

He gave evidence that the practice of solicitors for

purchasers in cases such as this was not to accept

the letter of undertaking, which was a letter of

undertaking to answer requisitions, but to require

withdrawal of the caveats to be recorded on the

register before settlement.

(Continued on page 21)

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MR DAVIES (continuing):  The questions which he was asked

appear at page 65 and his answers appear in

paragraph 11 on page 66. Your Honours, it is

important, in our respectful submission, that the

applicant's solicitor, Mr Wockner, accepted that

what Mr Purcell deposed to in that paragraph 11
was the prudent practice of conveyances in

Queensland and that appears, Your Honours, on

page 75 in the first sentence of paragraph 6 of

Mr Wockner's affidavit and presumably

Mr Wockner and Mr Purcell were talking about the

practice under the standard form of contract, the
contract which is before Your Honours.

Mr Purcell's evidence of practice and his opinion

was accepted by both the trial judge, which

appears at the middle of page 5 of the application

book, and by all members of the Full Court. I

will not take Your Honours to the trial judge's

judgment. Can I take Your Honours to the Full Court

judgment, the judgment of the Chief Justice?

First of all, towards the bottom of page 18 he refers to Mr Purcell's evidence and over on the

top of page 19 and then His Honour comments at

the middle of page 25 that:

the primary judge has shown an inclination

to accept Mr Purcell's view of the

practice of conveyancers in Queensland and

this must be a matter of weight especially

in view of that gentleman's experience

and standing.

And, it follows from what His Honour said, with

whom the senior puisne judge agreed, in the

subsequent parts of his judgment that he accepted

that too as did the other member of the Full Court,

Mr Justice Shepherdson, at page 38.
His Honour Mr Justice Shepherdson spoke of that

in the last)! two paragraphs on page 38 and clearly

enough~ Your Honours, what Their Honou1;s were saying

was that the course which the purchaser followed in refusing to settle was one which it was entitled to

follow in order to minimize, so far as reasonably

possible, the risk of failing to obtain registration

or to adopt the phrase which Your Honour took from

the judgment of Chief Justice Barwick in

GODFREY CONSTRUCTIONS, "entitled to refuse to

settle until the caveat was removed or its removal

certainly assured", because certainly the view was

accepted on all sides that it was not certainly
assured because prudence dictated that until the

caveat was removed from the title that there was a

risk, a real risk.

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BRENNAN J:  Well, the question, I suppose, which might be

outstanding on that approach is, whether

whatever the practice might be, is the lodging of

an instrument of withdrawal effective in law to

remove the caveat?

(Continued on page 23)

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MR DAVIES:  Our short answer to that would be that that is not

so because the effect of section 102 of the Act is that

the removal of the caveat is only effected by cancellation

by the registrar under section 102. Because

section 102 deals with, really~ all asoects of circumstances

in which a caveat might be cancelled and, in our

respectful submission, the effect of the provision

is that the caveat does not cease to be in force so

as to forbid registration of an instrument until

cancellation. So we would say, really, in answer to

our learned friend's first point,which he says to be one

of general importance, that it is really answered by

SE!•:tion 102 of the REAL PROPERTY ACT. And that, that

being so, that the - - -

BRENNAN J:  I do not think we need to trouble you further, in that event, Mr Davies.

MR DAVIES: If Your Honour pleases.

BRENNAN J:  Mr Harrison, have you anything to say in reply?

In particular, of course, about the operation of

section 102.

MR HARRISON:  In relation to section 102, it is our submission

that it is concerned with the case of the removal of

what is in effect a defunct caveat, a caveat which
has ceased to be required to serve any purpose, and is

not concerned with the standard case of a withdrawal

by the person who has lodged it.

BRENNAN J:  Does it not deal with the case of a claim of the

person by whom it is lodged, is withdrawn?

MR HARRISON:  It refers to the case - certainly it uses the

words "the claim is withdrawn". but that concentrates

on the claim and is concerned with the circumstances

where, in our submission, there is no actual withdrawal

by the lodger, but a person with an estate or interest

can show that the lodger is no longer maintaining his

claim, and in such case the person - the registered

proprietor, for example - is saved the need to go to

· court for removal by this procedure involving not only

the registrar but the Master of Titles.

BRENNAN J:  In other words, it can be cancelled on the application

of the registered proprietor but not on the application

of the caveator?

MR HARRISON:  On the application of the caveator, in our

submission, it is not necessary to involve this
procedure, this quasi-judicial procedure, that

requires the opinion of the ·Master of Titles. May

I say that that is the view taken, at least in one

textbook that is Kerr on the Australian Land Titles

System, page 596, where the learned author says:

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"In Queensland there is no express provision enabling
the caveator to withdraw his caveat, but in practice

the caveator may withdraw his caveat by notice." And

then the author goes on to deal with section 102 as

dealing with a different class of case. It would, in

our submission, effect a very severe and inconvenient

result if this Court were to hold that all removals of

caveat had to be considered by the Master of Titles
before they could be registered, and would result in
an enormous interference with the normal operations of
the Titles Office if that practice were required

to be instituted.

(Continued on page 25)

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BRENNAN J: If that is the question that remains for

determination, we are devoid of any consideration

of the problem by either of the courts below,

are we not?

MR HARRISON:	It was in fact canvassed before the Court below and Mr Justice Shepherdson adopted the
view contended for by my learned friend. The
Chief Justice did not in fact deal with it in his judgment although, in our submission,
one would infer from the fact that he makes no
mention of it that His Honour was not relying
on that section and had accepted our submissions
that section 102 did not arise in the present
case.

Your Honours, in relation to the evidence

of Mr Purcell, there was some conflict which

we do not wish to go into. One point we would

like to make however, is that one can well

understand that a cautious conveyancer may be

disinclined, if he can, to· accept a withdrawal

of a caveat when it is uncertain when that

withdrawal takes effect. In other words, it

is not surprising,with the current uncertainty

as to when withdrawal takes effect, that

conveyancers take this· view. A determination

of that point would, of course, imrediately change the

practice to one that is more efficient in

the circumstances.

BRENNAN J: Yes, Mr Harrison, you have nothing further

to add?

MR HARRISON:  I have nothing further, Your Honour.

BRENNAN J: These proceedings arose from a dispute

between a vendor and a purchaser under a

contract for the sale of land under the

REAL PROPERTY ACT 1861 (Queensland). Clause 2

of the contract, which is in a form standard

in Queensland, required the purchaser to pay

the balance of the purchase price:

on the date for completion stated ..... in

ex~hange for possession ..... together

with a duly executed transfer in favour

of the Purchaser capable of innnediate

registration (after stamping) in the

appropriate office free from

encumbrances ..... and accompanied by the

instrument of title.

Time was of the essence of the contract. On

the day fixed for completion the purchaser,who was

ready ~nd willing to complete subject to an objection

next to be mentioned, declined to accent in

discharge of the vendor's obligation the documents

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which the vendor's solicitor offered. At that

time a caveat, lodged by a purchaser under a

previous contract, was noted on the title.

Three other instruments had been lodged to which dealing numbers had been attached but
which had not then been noted on the title:

a withdrawal of the registered caveat, a

second caveat by the same caveator and a

withdrawal of the second caveat. The last of

the unregistered instruments had been

lodged earlier on the same day.

The solicitors for the vendor insisted

on completion at their offices in Surfers

Paradise where the solicitor for the purchaser

was offered inter alia copies of the unregistered

instruments withdrawing the first and the

second caveats, together with an undertaking

by the solicitor for the caveator to answer and

comply with any requisitions issued by the

Titles Office. The solicitor for the purchaser

objected that the transfer which was tendered

was not capable of immediate registration as

clause 2 of the contract required. The purchaser

purported to rescind for breach and the question
was-whether the objection was well-founded.

The vendor failed in the Suoreme Court on one or other of two associated grounds: first,

that the first caveat, so long as it was
registered on the title, precluded the immediate

registration of the transfer; second, that what the vendor's solicitor offered was not

sufficient to establish that the removal of the caveat was certainly assured. These two

grounds reflect the grounds on which the

purchaser was held entitled to refuse to settle

in GODFREY CONSTRUCTIONS PTY LTD V KANANGRA

PARK PTY LT~ (1972) 128 CLR 529 at 537 where

Chief Justice Barwick said that the purchaser

the caveat has been removed or its removal	is clearly entitled to refuse to settle until
certainly assured.

In· ·the Supreme Court there was a divergence

of view about the temporal connotation of the

word "immediate" in clause 2, but in the result

the point is immaterial. At best for the

applicant, she must show that special leave should

be granted to canvass the correctness of the view

of the majority of the Full Court (Chief Justice

Macrossan and Mr Justice Kelly Senior Puisne Judge)

that removal of the caveat was not certainly	·
assured.	The only question of law which that

involves is the question whether a caveat noted

on the title is immediately cancelled on lodgement

of a notice of withdrawal. The majority of the

Full Court assumed the contrary, and there was

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26   17/11/89

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no consideration of this point as a discrete

question of law. Rather Their Honours treated
the question as material to the certainty of

the assurance that the caveat would be removed.

If it be arguable that section 102 does not

cover the withdrawal of a caveat, this case is

not an appropriate vehicle to raise that

question for determination. On the approach

of the majority of the Full Court the question

was essentiallv one of fact and tPat is not

an appropriate· question to attract the grant

of special leave. Accordingly, special leave

will be refused.

MR DAVIES:	We ask for costs, may it please the Court.
·BRENNAN J:	Mr Harrison?
MR HARRISON:	We do not have anything to say about that,

Your Honours.

BRENNAN J: Very well. Special leave will be refused

with costs. The Court will now adjourn briefly.

AT 10.38 AM THE MATTER WAS ADJOURNED SINE DIE

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