Cini v Pets Paradise Franchising (SA) Pty Ltd - [2008] SASC 287

SUPREME COURT OF SOUTH AUSTRALIA
(Applications Under Various Acts or Rules: Civil)
CINI & ORS v PETS PARADISE FRANCHISING (SA) PTY LTD & ORS
[2008] SASC 287
Judgment of The Honourable Justice Bleby
27 October 2008
PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - CONCURRENT JURISDICTION OF DIFFERENT COURTS - TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION
Plaintiffs seek removal of caveats registered over land in six different states and territories, including South Australia and Victoria – application to transfer proceedings from Supreme Court of South Australia to Supreme Court of Victoria, pursuant to cross-vesting legislation – whether transfer to Victoria is in the interests of justice – consideration of principles upon which cross-vesting scheme is based – where agreements giving rise to caveats contain clause stating that Victorian law is the governing law – no exclusively Victorian legal question to be determined – substantial delay and costs would be incurred if proceedings transferred – Supreme Court of South Australia equipped to hear and determine the caveat proceedings forthwith – Supreme Court of Victoria is not a more appropriate forum – application dismissed.

REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - HARSH AND UNCONSCIONABLE CONTRACTS AND STATUTORY REMEDIES
Application to remove fifteen caveats – consideration of grounds on which caveat will be considered defective – nature of defendants’ interest or defendants’ identity in six caveats misdescribed – whether caveats defective – whether Court may amend defective caveats – defendants granted liberty to apply for an order to amend defective caveats.
Consideration of principles relating to removal of caveats – whether serious question to be tried as to defendants’ caveatable interest in land – agreement to charge plaintiffs’ property as security for debt to defendants – agreement authorising defendants to register caveat in respect of charge – allegation that defendants failed to identify and explain unusual terms in agreement – allegation of misleading and deceptive conduct – whether defendants have established serious question to be tried by reference to content of agreements – validity of underlying charge is a matter for trial and not to be determined in these proceedings – whether balance of convenience favours defendants – whether there are discretionary matters which justify removal of caveat – no order on plaintiffs’ application.
Constitution ss 75, 76, 77; Real Property Act 1886 (SA) s 191; Real Property Act 1900 (NSW) s 74MA; Land Title Act 1994 (Qld) ss 121, 127, 192, Schedule 2; Transfer of Land Act 1958 (Vic) s 90; Transfer of Land Act 1893 (WA) ss 138, 138D; Land Title Act (NT) ss 142, 143; Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) ss 3, 4, 11; Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) ss 4, 11; Jurisdiction of Courts (Cross-vesting) Act 1987 (Qld) ss 4, 11; Jurisdiction of Courts (Cross-vesting) Act 1987 (NT) ss 4, 11; Jurisdiction of Courts (Cross-vesting) Act 1987 (Vic) ss 4, 11; Jurisdiction of Courts (Cross-vesting) Act 1987 (WA) ss 4, 11; Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) ss 5, 6; Trade Practices Act 1974 (Cth) s 47, Pt VI; Bradbrook, MacCallum and Moore, Australian Real Property Law (4th ed, 2007); Dr Donald Kerr, Principles of the Australian Land Titles (Torrens) System (1927); Butterworths, Halsbury's Law of Australia, vol 22 (at 22 October 2008) 355 Real Property, 'III Torrens System'; Peter Butt, Land Law (5th ed, 1998); Stephen Colbran and Sheryl Jackson, Caveats (1996), referred to.
BHP Billiton Ltd v Schultz (2004) 221 CLR 400; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, applied.
Valceski v Valceski (2007) 210 FLR 387; Iaconis v Lazar (2007) 13 BPR 24,937; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; Eades v Reilly (Unreported, Supreme Court of Western Australia, Heenan J, 20 November 1998); Sanctuary Park Estate Toodyay Pty Ltd v Griffin Plant Hire Pty Ltd [2003] WASC 174; Hamdan v Widodo [2004] WASC 123; Queensland Estates Pty Ltd v Co-Ownership Land Development Pty Ltd [1969] Qd R 150; Australian Wine Industries Pty Ltd v Imbrogno [1995] ANZ ConvR 195; Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; Porter v McDonald [1984] WAR 271; Custom Credit Corporation Limited v Ravi Nominees Pty Ltd (1992) 8 WAR 42; Whallin v Bailbart Investments Pty Ltd (1987) 47 SASR 198; Nexus Mortgage Securities v Mawson KLM Holdings Pty Ltd (1997) 193 LSJS 474, discussed.
Re Wakim; ex parte McNally (1999) 198 CLR 511; Asciano Services Pty Ltd v Australian Rail Track Corp Ltd [2008] NSWSC 652; Crompton Specialties Pty Ltd v BASF Australia Ltd [2006] SASC 39; Pegasus Leasing Ltd v Tieco International (Australia) Pty Ltd (1993) 61 SASR 195; FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 117; Sarah Civil Pty Ltd v Stork ICM Australia Pty Ltd (Unreported, Supreme Court of South Australia, Lander J, 12 June 1998); Jones v Dunkel (1959) 101 CLR 298; Parker v South Eastern Railway Co (1877) 2 CPD 416; Wilton v Farnworth (1948) 76 CLR 646 ; Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197; George Biztole Corp Pty Ltd (1995) V ConvR 54-519; Eng Mee Yong v V. Letchumanan s/o Velayutham [1980] AC 331; Troncone v Aliperti (1994) 6 BPR 13, 291; Coleman v Bone (1996) 9 BPR 16, 235, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"cross-vesting” “interests of justice” “more appropriate forum” “caveat” “serious question to be tried” “balance of convenience"

CINI & ORS v PETS PARADISE FRANCHISING (SA) PTY LTD & ORS
[2008] SASC 287
Civil
BLEBY J.
Introduction

There are eleven plaintiffs in this action and five defendants. The defendants are all related corporations. The plaintiffs are either parties to franchise agreements with one of the defendants, parties to a guarantee and indemnity agreement relating to the performance of obligations of franchisees who are parties to franchise agreements with one of the defendants, or parties to a guarantee and indemnity agreement relating to the performance of the obligations of such franchisees under a supply agreement with one of the defendants. Each of the plaintiffs applies for an order for the removal of a caveat or caveats registered by one of the defendants in purported exercise of and in reliance upon an authority said to be created by a relevant agreement with each plaintiff. The defendants rely upon the terms of the agreements for the creation of a charge by the respective plaintiffs and, in some cases, for the express authority to the respective defendants to register a caveat.
The caveats the subject of the plaintiffs’ application are registered over land in South Australia, Victoria, New South Wales, Queensland, Western Australia and the Northern Territory. There are some 15 caveats in question.
For removal of the caveat lodged in respect of the land in South Australia the relevant plaintiff relies on s 191(d) of the Real Property Act 1886 (SA). In respect of a number of caveats lodged over land in New South Wales the relevant plaintiffs rely on s 74MA of the Real Property Act 1900 (NSW). In respect of caveats lodged over land in Queensland the relevant plaintiffs rely upon s 127 of the Land Title Act 1994 (Qld). For the caveat lodged in respect of the land in Victoria the relevant plaintiff relies on s 90 of the Transfer of Land Act 1958 (Vic). For the caveat lodged in respect of the land in Western Australia the relevant plaintiff relies on s 138 of the Transfer of Land Act 1893 (WA). In respect of the caveat lodged over the land in the Northern Territory the relevant plaintiff relies on s 143 of the Land Title Act (NT).
By virtue of ss 4 and 11 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) and the corresponding provisions of other relevant State and Territory Acts,[1] this Court is vested with such judicial power as the Courts of those other States and Territories have conferred on them under the terms of their respective Acts. It follows that where the Supreme Court of another State or Territory has had conferred on it jurisdiction to remove caveats lodged in that State or Territory, this Court can exercise the powers of those Courts in respect of such caveats. This Court becomes, effectively, a Court of each of those other States and Territories and has jurisdiction to remove the caveats lodged in those States and Territories.
[1] Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW), ss 4 and 11; Jurisdiction of Courts (Cross-vesting) Act 1987 (Qld), ss 4 and 11; Jurisdiction of Courts (Cross-vesting) Act 1987 (NT), ss 4 and 11; Jurisdiction of Courts (Cross-vesting) Act 1987 (Vic), ss 4 and 11; Jurisdiction of Courts (Cross-vesting) Act 1987 (WA) ss 4 and 11.
However, each of the agreements in question, whether a franchise agreement or a guarantee and indemnity agreement, contains the following provision:
This Agreement [Deed] will be governed by the laws of Victoria and the parties [Guarantor] hereby submit[s] to the jurisdiction of the Courts of that State and courts competent to hear appeals therefrom.
The defendants have applied pursuant to s 5(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) (“the Cross-vesting Act”) for an order transferring these proceedings to the Supreme Court of Victoria. It is convenient to deal first with that application.
Application to transfer proceedings to Victoria
Where a proceeding, such as the present, has been commenced in this Court, the grounds specified in s 5(2)(b) of the Cross-vesting Act on which such an action must be transferred may be summarised as follows:
(a)There is a related proceeding pending in another Supreme Court and it is more appropriate that this proceeding be determined by that Court. That is not applicable in this case;
(b)It appears to this Court that, having regard to certain matters stated in the subsection, it is more appropriate that this proceeding be determined by another Court. The only relevant matter stated is the extent to which, in the opinion of this Court, the matters in question arise under or involve questions as to the application, interpretation or validity of the law of another State or Territory and not within the jurisdiction of this Court other than by virtue of the Cross-vestingAct. Reference has been made to each of the laws under which the application is made. They are all of similar effect. It was not seriously argued that this ground is relevant;
(c)It appears to this Court that it is otherwise in the interests of justice that the proceeding be determined by the Court of another State or Territory.
The argument before me concentrated on whether it was in the interests of justice that the proceeding be determined by the Supreme Court of Victoria.
Neither party sought to depart from the principles upon which the cross-vesting scheme is based as described by the High Court in BHP Billiton Ltd v Schultz.[2] Those principles may be summarised as follows:
·It is not relevant to ask whether this Court is justified in refusing to exercise the jurisdiction conferred on it. Rather, it must ensure that the case is heard in the forum dictated by the interests of justice.[3]
·The question is not whether this Court is an inappropriate forum. It is both necessary and sufficient that, in the interests of justice, the other Court is more appropriate.[4]
·The Court is required to ensure that cases are heard in the forum dictated by the interests of justice. It is not a question of the exercise of a discretion.[5]
·The interests of justice are not necessarily the same as the interests of any one party.[6]
·Because it is necessary to identify the more appropriate forum, no specific emphasis can be given in favour of the choice of forum made by the plaintiff.[7]
·It is inapt to speak of the applicant for an order for transfer as bearing a burden of persuasion analogous to an onus of proof.[8]
[2] (2004) 221 CLR 400; [2004] HCA 61.
[3] Ibid 421, [14].
[4] Ibid 421, [14]; 436, [69].
[5] Ibid 421, [14]; 434–435, [63].
[6] Ibid 421, [15].
[7] Ibid 421-422, [15]–[16]; 439, [77]; 465-466, [168]-[169]; 492, [258].
[8] Ibid 437, [71].
It is appropriate to consider first the nature of the proceedings. The application of the plaintiffs is a series of discrete applications to remove caveats. It is not accompanied by and does not form part of a pleading involving any other cause of action, nor is it associated with any other proceeding in this Court or in the Supreme Court of another State or Territory. There are no proceedings on foot in any other jurisdiction to perfect the alleged interests of the defendants which are said to be protected by the caveats.
Proceedings against some of the plaintiffs have been brought by one or more of the defendants in the County Court of Victoria and in the District Court of NSW alleging breach of contract and claiming monetary remedies only under one or more of the agreements mentioned. Those actions do not involve enforcement of the securities allegedly held by the defendants. There is no application in Victoria to remove the caveats or affecting their validity. There is no suggestion that, in respect of the Victorian land in question, the Victorian County Court has jurisdiction to remove the caveat under s 90 of the Transfer of Land Act 1958 (Vic) or that it has jurisdiction to do so in respect of caveats over land in other States and Territories.
The plaintiffs have also instituted proceedings in the Federal Court of Australia against the defendants for various alleged breaches of the Trade Practices Act 1974 (Cth) and seeking a variety of remedies available under that Act. Those proceedings call in question the validity and ongoing effectiveness of the documents on which the defendants’ caveats are based. However, the Federal Court cannot exercise the jurisdiction of this Court in relation to the removal of the caveats, that not being a matter referred to in ss 75 and 76 of the Constitution in respect of which power could be conferred on the Federal Court by s 77 of the Constitution.[9]
[9] See Re Wakim; ex parte McNally (1999) 198 CLR 511.
This application is in the nature of an interlocutory injunction pending trial of the substance of the issues between the parties in the Federal Court. It is an application usually determined on affidavits. This case is no exception. All the parties have filed in these proceedings all affidavits on which they wish to rely in respect of the plaintiffs’ application to remove the caveats. No party requires any deponent to an affidavit to be called for cross-examination. This Court is therefore in a position to be able to proceed immediately to determine the plaintiffs’ application with respect to each caveat that has been lodged by the defendants.
The question of the more appropriate forum was discussed by Brereton J in Valceski v Valceski[10] where his Honour said:
In identifying the “more appropriate forum”, relevant considerations include the cost and efficiency of proceedings in the respective jurisdictions, and the “connecting factors” described by Lord Goff in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 at 478 – including matters of convenience and expense such as availability of witnesses, the places where the parties respectively reside or carry on business, and the law governing the relevant transaction [BHP v Schultz, 422 [18]].[11]
[10] (2007) 210 FLR 387; [2007] NSWSC 440.
[11] Ibid 411, [69]. See also Asciano Services Pty Ltd v Australian Rail Track Corp Ltd [2008] NSWSC 652, [9]; BHP Billiton Ltd v Schultz (2004) 221 CLR 400, 423; [2004] HCA 61, [19].
Leaving aside for the moment the provisions in the agreements relating to choice of law and the jurisdiction of the Courts of Victoria, the defendants argued that considerations of the type mentioned above weighed in favour of the defendants’ contention that the Supreme Court of Victoria was the most appropriate forum.
The defendants identified 15 supposed potential witnesses, the majority of whom reside in Victoria. However, it would appear that the evidence of these witnesses is only relevant to the issues which are now likely to be agitated in the Federal Court proceedings. Such matters as the determination of the indebtedness, the extent of the charge claimed by the defendants and a determination of the circumstances surrounding the execution of the agreements, will not be relevant to the determination of the present application. Even if they were, those issues include claims under s 47 and the remedial provisions of Part VI of the Trade Practices Act which is a matter exclusively within the jurisdiction of the Federal Court. As a “special federal matter”[12] it cannot be transferred to another State Court.[13]
[12] Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), s 3.
[13] Jurisdiction of Courts (Cross-vesting) Act 1987 (SA), s 6.
An agreement as to the governing law of a contract and as to the jurisdiction of a Court to determine matters arising under it will often be a relevant consideration on an application for transfer under s 5(2)(b) of the Cross-vesting Act. It was described as a “significant factor” by Duggan J in Crompton Specialties Pty Ltd v BASF Australia Ltd.[14] It was a relevant factor in refusing an application for transfer in Pegasus Leasing Ltd v Tieco International (Australia) Pty Ltd.[15] However, it can never be determinative of an application to cross-vest.[16]
[14] [2006] SASC 39, [14].
[15] (1993) 61 SASR 195.
[16] FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 117, 124; Sarah Civil Pty Ltd v Stork ICM Australia Pty Ltd (Unreported, Supreme Court of South Australia, Lander J, 12 June 1998, Judgment No.6713).
There is no exclusively Victorian legal question to be determined apart from the application of s 90 of the Transfer of Land Act. This is but one of a number of identical questions arising from the corresponding Acts of each of the other jurisdictions and which fall to be answered on what are essentially identical criteria. In the circumstances of this application and the issues which arise, the choice of law and jurisdiction clauses in the agreements carry very little weight.
The litigants have a common identity as either caveators or caveatees. There appear to be common issues raised by the subject matter in relation to the caveats. There is therefore potential for inconsistent judgments on similar facts if different Courts hear different applications. To allow the applications to proceed forthwith will be the most efficient use of court systems in determining what are similar issues and facts, to say nothing of avoiding a multiplicity of suits in a number of jurisdictions. The applications should therefore continue to be heard together.
As I have already observed, this application is in the nature of an interlocutory application. The interests of justice require that it be dealt with expeditiously. Substantial delay and substantially increased cost to all parties will be incurred if the proceedings are transferred to Victoria. In all of the circumstances, the Supreme Court of Victoria is not a more appropriate Court to hear the applications. There is everything to suggest that, in their present state, the applications would be heard and disposed of more efficiently and expeditiously in this Court than in any other Court. This Court is presently equipped to hear and determine the applications forthwith.

The interests of justice, in all of the circumstances, will best be served if the applications are heard and determined forthwith in this Court. The defendants’ application to transfer the proceedings must therefore be refused.
Removal of the caveats
The defendants’ concessions
At the outset of his submissions, Mr Keith, counsel for the defendants, conceded that the caveat over land in the Northern Territory, in respect of the plaintiff Akkaydrah Pty Ltd, had lapsed pursuant to s 142(5) of the Land Title Act (NT). He also conceded that two caveats registered over land in Queensland affecting the eighth plaintiff Lynda Jane Elizabeth Campbell, the ninth plaintiff Elizabeth Margaret Muir Campbell and Karl David Donnelly contain material misdescriptions of the alleged caveatable interest. He did not seek to defend any of those caveats. Accordingly, I made an order on 23 September 2008 directing that they be removed.
Other allegedly defective caveats
The plaintiffs challenged the effectiveness of six of the other caveats because of alleged deficiencies in their form. Before considering the alleged deficiencies, it is necessary to examine the grounds on which a caveat will be considered to be defective. At least one text writer notes that “[s]trict compliance is necessary and a caveat may be deemed defective for small, seemingly unimportant errors”.[17]
[17] Bradbrook, MacCallum and Moore, Australian Real Property Law (4th ed, 2007) [4.460].
In Eades v Reilly[18] the plaintiffs, builders, lodged an application to maintain a caveat over land on which they had carried out construction work. The caveat alleged an interest as “equitable mortgagee”. The contract did not create any charge over the land. It was conceded that the plaintiffs had an equitable lien over the land. In reaching the conclusion that the caveat should not be extended because it was defective on its face, Heenan J said:
A caveat may be expressed only to protect the particular interest claimed. It must both state that interest clearly and show how the caveator claims it. Otherwise it is defective and should be removed – Kerr: The Australian Land Titles (Torrens) System [at] 490; Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129 per Burt CJ at 131.[19] This caveat is defective in that the claim is expressed to be as “Equitable mortgagee”, a misstatement of the nature of the interest which the plaintiffs claim.
[18] Unreported, Supreme Court of Western Australia, Heenan J, 20 November 1998.
[19] Burt CJ said: “In my opinion the caveat was irregular upon its face in that it is expressed to be an absolute prohibition of dealings when in the circumstances it should have been expressed to operate only to protect the particular interest claimed…” He concluded: “…an order ought to have been made removing the caveat…” and “…until amended, it ought to have been removed because, for the reasons stated, it was irregular on its face.”
In that case, however, Heenan J did give leave for a further caveat to be lodged pursuant to s 138D(1)(e) of the Transfer of Land Act 1893 (WA).
Similarly in Sanctuary Park Estate Toodyay Pty Ltd v Griffin Plant Hire Pty Ltd,[20] in the context of an equitable lien claimed in support of a caveat, Barker J considered that the caveat should be discharged for the misdescription of the estate or interest claimed by the caveator as being that of “equitable chargee”.[21]
[20] [2003] WASC 174.
[21] See also George Biztole Corp Pty Ltd (1995) V ConvR 54-519 where the interest claimed was stated too broadly.
In Hamdan v Widodo[22] the Court held that there was a serious question to be tried as to the plaintiff’s claim to an equitable interest as purchaser of the estate in fee simple of the land in question. However, the caveat claimed an estate or interest “in fee simple as purchaser”. Jenkins J considered that the caveat was defective and could not be extended in that form.[23]
[22] [2004] WASC 123.
[23] Ibid [38]-[41].
Dr Kerr summarises the principles on which a court may act in relation to caveats in Principles of the Australian Land Titles (Torrens) System (1927) at pages 490 to 492. He states at page 490 that if “the caveat is irregular, then the Court should either remove the caveat or amend it”. While Dr Kerr gives some authority for instances when caveats are removed, none are quoted where caveats are amended.
I turn then to consider the terms of the caveats which are said to be defective. Five of them are in respect of land located in Queensland.
Section 121 of the Land Title Act 1994 (Qld) sets out the requirements for caveats in Queensland:
121 Requirements of caveats
…
(2)     The caveat must state—
(a)     the name of the caveator; and
(b)     an address where documents can be served on the caveator; and
(c)     unless the registrar dispenses with it, the name and address of—
(i)     the registered owner of the lot affected by the caveat; and
(ii)anyone else having the right to deal with the lot affected by the caveat; and
(d)     the registered interest affected by the caveat; and
(e)     if the caveat relates to only a part of a lot—a description of the affected part; and
(f)     the interest claimed by the caveator; and
(g)     the grounds on which the interest is claimed.
The first caveat to be considered is Caveat No.711441104 lodged over the land described as lot 99 on Registered Plan 224496 Title Reference 17318144, of which the caveatees are the fifth plaintiff Carol Ann Uttridge and Roy Edward Uttridge. The interest claimed by the caveatee is that of “an equitable share or interest of an estate in fee simple pursuant to an agreement between the Caveator and Registered Owner”. As Jenkins J noted in Hamdan v Widodo:[24]
A "fee simple" is the most expansive and absolute of all estates and confers the lawful right to exercise "every act of ownership which can enter into the imagination"; The Commonwealth of Australia v The State of New South Wales and Anor (1923) 33 CLR 1 at 42 per Isaacs J. To assert such a legal estate is incompatible with the admitted nature of the equitable interest that the plaintiff claims as a purchaser of a fee simple under an uncompleted contract for sale of land.
[24] [2004] WASC 123; [38].
The caveat specifies a broader interest than that of chargee under the agreement. It does not comply with s 121(2)(f). However, that portion of the caveat specifying the grounds of the claim sets out the relevant clause of the agreement under which the charge is created. Nevertheless, I consider that the caveat is defective by virtue of the description of the interest claimed.
Four of the caveats are drawn in similar form. They are –
·Caveat No.710848524 lodged over land described as Lot 31 Registered Plan 128917 Title Reference 14681219 of which the registered proprietors are the sixth plaintiff Paul Raymond Whiley and Patricia Suzanne Vardy;
·Caveat No.710848535 lodged over the same land as that described immediately above and having the same registered proprietors;
·Caveat No.710568812 over land described as Lot 17 Survey Plan 156630 Title Reference 50445433, of which the registered proprietors are the seventh plaintiff Karen Lisa Vogelmann and Peter Hans Vogelmann;
·Caveat No.710568797 over the same land as described immediately above with Mr and Mrs Vogelmann as registered proprietors.
The description of the interest claimed in the first two caveats is “1/2 equitable share or interest as Mortgagee of Paul Raymond Whiley’s interest as Tenant in Common”. In the last two caveats the interest claimed is “1/2 equitable share or interest as Mortgagee of Karen Lisa Vogelmann’s interest as Joint Tenant”.
Those descriptions raise two problems. The respective interests of the caveatees are not as mortgagee in the sense in which that is commonly understood. However, Schedule 2 (the dictionary) of the Land Title Act 1994 (Qld) defines “mortgage” as including “a charge on a lot or an interest in a lot for securing money or money’s worth”. Section 192 of the Land Title Act provides:
192 Words and expressions used in instruments under Act
(1)Words and expressions used in instruments made or executed under this Act and also in this Act have the same respective meanings in the instruments as they have in this Act.
(2)The application of subsection (1) to an instrument may be displaced, wholly or partly, by a contrary intention appearing in the instrument.
It follows that, unless some contrary intention appears in the caveat, and it does not, the reference to “Mortgagee” in the description of the interest claimed is sufficiently accurate to include the interest in fact claimed by the respective caveators.
However, there is a continuing difficulty as to precisely what the description of the interest in each case means. Taken literally, it seems to mean a half interest in the named party’s interest either as tenant in common or as joint tenant. I consider the description of the interests sufficiently vague and uncertain as to render the caveat defective, as not complying with s 121(2)(f) of the Land Title Act. However, as in the case of the first caveat mentioned above, the grounds on which the interest is claimed sets out an extract from the provision of the relevant contract where the charge is created.
The sixth caveat is in respect of the land situated in South Australia. It is Caveat No. X10991610 over the whole of the land comprised in Certificate of Title Register Book Volume 5069 Folio 628 registered in the name of Rochelle Terena Semmler. The caveator is named as “Pets Paradise (Franchising) Pty Ltd (ACN 069 620 391)”. The company so named is one of the defendants, but it has a different ACN. It is not the party to the relevant franchise agreement. The name of the party in whose favour the charge is given by the agreement is Pets Paradise Franchising (SA) Pty Ltd whose ACN is that described in the caveat. There is therefore a misdescription of the true caveator.
Section 191(a) of the Real Property Act 1886 (SA) is less prescriptive than its Queensland counterpart. It merely provides:
(a) Form of caveat
a caveat shall be in the appropriate form, and shall be under the hand and verified by the declaration of the caveator or his agent, and shall contain an address within South Australia to which notices may be sent or at which proceedings may be served;
There is no prescribed form. Nevertheless, the identity of the caveator is fundamental. I consider that there is a sufficient misdescription to render the caveat defective.
The question then arises as to whether these defective caveats must be removed, perhaps with the granting of permission to lodge a further caveat, or whether it is possible for the Court to amend the caveat. None of the statutory provisions confer any specific power to permit the Court to amend a caveat. There are conflicting decisions as to whether an amendment to the caveat may be made by the Court on an application for removal.[25] The preponderance of authority would appear to be in favour of the Court having power to order an amendment to the caveat upon an application by the caveatee to remove the caveat. This is because, in each case, the Court is given power to “make such order as appears just in the circumstances”[26] or power to make an order “on the terms it considers appropriate”[27] or other like expressions. Similar expressions do not appear in every Act in relation to an application to extend the time for removing the caveat. That may well provide a basis for some difference in approach in some of the cases.
[25] See Halsbury’s Laws of Australia, vol 22 (at 22 October 2008) 355 Real Property, “III Torrens System” [355-8270]; Butt, Land Law (5th ed, 1998), 748-749, [2040]; Colbran & Jackson, Caveats (1996) 283-287, [6.8.1].
[26] Real Property Act 1886 (SA) s 191(d).
[27] Land Title Act 1994 (Qld) s 127.
Since the decision of the Full Court of the Supreme Court of Queensland in Queensland Estates Pty Ltd v Co-Ownership Land Development Pty Ltd[28] it appears that such amendments may be made by the Court in respect of a Queensland caveat. In South Australia Judge Burley considered the position in Australian Wine Industries Pty Ltd v Imbrogno.[29] That was a case in which the plaintiff sought an order extending the time for removal of three caveats. There were several acknowledged mistakes in the description of the interest claimed in the caveats. His Honour doubted the power of the Court to direct an amendment of the caveat. However, he considered that the same effect could be achieved by allowing the filing of a further caveat with the leave of the Court pursuant to what is now s 191(k) of the Real Property Act 1886 (SA). It is relevant to observe that upon an application to extend the time for removal of a caveat, the Real Property Act does not confer on the Court in this State the type of wide power that is conferred by s 191(d) on an application for removal of a caveat. I consider that the power expressed in that paragraph is sufficiently wide to ensure that justice is done between the parties, and that rights should not be lost merely because of some technical mistake usually made by the caveator’s advisors.
[28] [1969] Qd R 150.
[29] [1995] ANZ ConvR 195.
In the case of the five Queensland caveats, the grounds make clear the contractual provision on which the claim for the caveatable interest is made, notwithstanding the misdescription of that interest in the body of the caveat. Applying the law of Queensland, as I must, I consider that there is power to direct the amendment of the caveat. It is not for me to determine the terms of any such amendment. I think it is appropriate that the Court should entertain an application by the relevant defendants for an order to amend the relevant caveats, if such application is made expeditiously.
Because this is an application under s 191(d) of the Real Property Act I consider that the same should apply in respect of the South Australian caveat. The misdescription would appear to be the result of carelessness in the preparation of the document. However, it would also be open to the actual franchisor in that case to lodge a fresh caveat at any time without the permission of the Court, as it would be a caveat by a different entity from the one named in the present caveat.
Relevant principles relating to the removal of caveats
As to the remaining applications, they are made pursuant to the relevant interstate counterpart of s 191(d) of the Real Property Act 1886 (SA). The applications are made by the registered proprietor of the estate in fee simple in the land the subject of the caveats. The relevant statutory provisions enable such a person to apply to the Court either for the removal of the caveat or to require the caveator to show cause why the caveat should not be removed.
An alternative procedure available in most jurisdictions is typified by s 191(e) of the Real Property Act enabling the caveatee to warn the caveat, whereupon the Registrar-General is to remove the caveat after a specified time, which time may be extended by the Court on application of the caveator under s 191(g) or its equivalent. If an action is being brought by the caveator to establish the validity of the claim on which the caveat is based, the Court may direct that the time for removal of the caveat be extended until further order.[30]
[30] See Whallin v Bailbart Investments Pty Ltd (1987) 47 SASR 198, 203-204, Cox J.
An application of that nature is to be treated in a similar manner to an application by a caveator for an interlocutory injunction to restrain dealings in the land pending determination by a court of competent jurisdiction of the existence, nature and extent of the disputed interest of the caveator in the relevant land.[31] The same principles apply to an application of the nature before me where no steps have been taken to warn the caveat.[32]
[31] Whallin v Bailbart Investments Pty Ltd (1987) 47 SASR 198.
[32] Eng Mee Yong v V. Letchumanan s/o Velayutham [1980] AC 331, 336.
The defendants must therefore show that there is a serious question to be tried as to the caveatable interest in the land, that the balance of convenience favours maintaining the caveat and that there are no discretionary matters which might justify removal of the caveat.[33] I do not accept the argument of Mr Rochow, counsel for the plaintiffs, in his written submission that a serious question to be tried means that, in a case like the present, it must be shown that there is a real prospect of the caveator succeeding in the claim in respect of which the caveat purports to maintain the status quo, or that the caveator must show that it is more probable than not that, at trial, the caveator will succeed. As Gummow and Hayne JJ observed in Australian Broadcasting Corporation v O’Neill:[34]
[I]t is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.
The reference to the plaintiff is a reference, in a case like the present, to the caveator.
[33] See generally Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, 81-84; [2006] HCA 46, [65]-[72], Gummow and Hayne JJ with whom Gleeson CJ and Crennan J agreed at 68, [19].
[34] Ibid 82, [65].
Mr Keith suggested that the test his clients had to meet was even less stringent. He referred to a dictum of Brinsden J in Porter v McDonald[35] that the authorities “seem to establish a caveat should not be set aside pursuant to s 138 of the [Transfer of Land Act 1893 (WA)] unless the claim to the estate appears to be without any validity or that the interest, which in the first place justified the lodging of a caveat, no longer exists.” In the same case, Rowland J with whom Burt CJ agreed, said:
The practice with respect to the removal of caveats is one of long standing. The caveat will not be removed unless the claim to an estate or interest in the land appears to be without foundation. The courts will not, except in the most exceptional case, decide the matter on summons. ….
It is also true that in more recent cases courts have indicated that in the exercise of discretion they will have regard to matters that would be relevant to an application for an interim injunction (see Martyn v Glennan [1979] 2 NSWLR 234; Re Clement’s Caveat [1981] Qd R 341; Re Jorss’ Caveat [1982] Qd R 458. In all those cases the issue is whether the plaintiff or the caveator had an enforceable or existing interest in land.[36]
It is to be noted, however, that in Porter v McDonald the existence and validity of the caveat was not in question. The argument of the caveatee for removal was based largely on an alleged implied term of the agreement in question, a claim to an equitable set-off and the balance of convenience. The comments must be read in that context. Furthermore, in the later Western Australian case of Custom Credit Corporation Limited v Ravi Nominees Pty Ltd[37] Owen J, with whom Malcolm CJ and Walsh J agreed, said, where the existence of the caveat was in dispute:
Although the grounds of appeal suggest to the contrary, the appellant appears to have accepted in argument before this Court that the onus lies on a caveator in proceedings under s 138 to demonstrate that there is a valid caveatable interest or, more correctly, that there is a serious question to be tried on the issue. That is what his Honour found and, in my opinion, it is a correct statement of the law.[38]
[35] [1984] WAR 271, 273-274.
[36] Ibid 276.
[37] (1992) 8 WAR 42.
[38] Ibid 48.
In this case the validity of the defendants’ caveatable interests is in dispute. The defendants must therefore show that in relation to that question there is a serious issue to be tried in the sense discussed by the High Court in Australian Broadcasting Corporation v O’Neill.
It must also be shown that the balance of convenience favours the caveator. That view was expressed by Cox J in Whallin v Bailbart Investments Pty Ltd.[39] Although questioned, it was nevertheless applied by the Full Court in Nexus Mortgage Securities v Mawson KLM Holdings Pty Ltd.[40]
[39] (1987) 47 SASR 198, 203.
[40] (1997) 193 LSJS 474.

However, the balance of convenience may, in some circumstances, carry little weight where, for example, the existence of the caveatable interest is not challenged and the caveat, by its terms, seeks to protect that interest. I have already referred to some of the observations of Brinsden J in Porter v McDonald. In that case he also said:
In my view in such an application as was before his Honour, where the existence of the caveatable interest was not challenged and the caveat by its terms sought to protect that interest, there is no room for an argument based on the balance of convenience that the caveat should be ordered to be removed. It is only necessary to consider the consequences should the caveat be ordered to be moved and the appellants fail in their action for damages. The land would by that time have been transferred out of their ownership and they would still owe a large sum of money pursuant to the sale but the respondents would have lost their contractual right to protect themselves in respect of the payment of the balance owing by lodging a caveat against the subject land.[41]
[41] [1984] WAR 271, 274.
Given the statutory effect of a caveat, it may be that in many cases, if there is a serious question to be tried as to its validity, the balance of convenience will inevitably favour the caveator. The following observations of Owen J in Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd are relevant:
In my opinion, the balance of convenience is a factor to be considered in an application under s 138. However, it seems to me that interlocutory removal of a caveat where an arguable case as to the existence of the caveatable interest has been demonstrated, will be unusual. It is important to bear in mind the nature and purpose of a caveat under the Torrens System. By its very nature, a caveatable interest must be a proprietary interest in land. The purpose of the caveat is to restrain the registered proprietor from dealing with the land in a way which will defeat or derogate from the incidents attaching to that proprietary interest until the respective rights of the parties have been honoured (if there is agreement) or determined (if there is disagreement). In many cases, removal of the caveat will have the effect of destroying for all practical purposes, the benefit of the proprietary interest. For example, a creditor, having a specific security interest in land, will rank as an unsecured creditor once the property, the subject of the specific security, no longer exists. This will often be the result of removal of a caveat which permits the registered proprietor to sell the property free from any practical obligation to account to the secured creditor for the proceeds of sale.[42]
[42] (1992) 8 WAR 42, 50.
Serious question to be tried
The clause in the agreements relied on by the defendants as creating the charge the subject of the caveats is in the following form, subject to variation as to parties depending on whether it appears in a franchise agreement, a supply agreement or an agreement of guarantee and indemnity:
The [Guarantor] hereby agrees to charge his/her property, both real and person, and including any future property as security in favour of the [Franchisor] for any debt owing to the [Franchisor] by the Franchisee and authorises the [Franchisor] to register a caveat in respect of this charge over any such property.
This is not a case where the defendants rely upon the mere granting of a right to lodge a caveat itself as creating a caveatable interest.[43] The principle on which the defendants rely is that stated by McLelland CJ in Eq in Coleman v Bone:[44]
Where the authority to lodge a caveat is given in connection with an obligation by A to pay money to B, and there is no sufficient indication to the contrary, the implication is that the estate or interest granted is an equitable charge to secure payment to B of that money.
[43] See Troncone v Aliperti (1994) 6 BPR 13,291.
[44] (1996) 9 BPR 16,235, 16,239.
The plaintiffs argue that there is no evidence of any attempt by the defendants to enforce the underlying equitable interests said to support the caveats. They rely on a passage in the judgment of Young CJ in Eq in Iaconis v Lazar[45] where his Honour observed:
I should record Mr Allan’s submission that the scheme of the Real Property Act is that caveats are temporary. He says that it is an abuse of the processes of the Torrens System for people to take the view that they can enter into a commercial contract of adhesion in which there is a clause either prominent, or more usually buried away, which claims to impose a charge on all of the borrower’s property and then to lodge a caveat never ever seeking to do anything else, at least until default.
I consider there is a fair degree of substance in that submission. A caveat should only remain on the title pending the application by the person claiming the equitable or other interest to commence a suit for specific performance or otherwise to vindicate that equitable interest. Indeed, the standard order when a caveat was challenged was that the caveat be removed in any event unless within a month the caveator commenced a suit and then, and only then, was the caveat to be extended until the hearing of the suit; see eg Ex parte Muston (1903) 3 SR (NSW) 663.[46]
[45] (2007) 13 BPR 24, 937; [2007] NSWSC 1103.
[46] Ibid 24,940-24,941; [21]-[22].
It is correct that there is no evidence before me that the defendants have taken steps to vindicate the equitable interests that they claim. The proceedings that they have commenced against the plaintiffs seek only to recover money. However, there can be no doubt that, by their proceedings commenced in the Federal Court of Australia, the plaintiffs are challenging the validity and enforceability of the charge on a number of grounds, and present indications are that the defendants will strongly resist that challenge. The defendants allege that default has occurred and that moneys are owing to them secured by the charge. Whatever the situation may have been before the present dispute erupted, it is clear that the defendants will be looking to enforce the charge which they believe they have.
The plaintiffs also argued that in the proceedings which the defendants have commenced, the only remedy sought is a remedy in personam, and that the defendants must be taken to have elected in favour of pursuing that right, and to have abandoned the alleged right in rem. I do not consider that this is so. To pursue a personal remedy and to sue on personal covenants in order to establish the existence of a debt where a liability for that debt is known to be disputed is not inconsistent with maintaining that the equitable charge exists. It is consistent with merely deferring action to enforce the charge until after the debt is established. I reject the plaintiffs’ argument that, by their conduct, the defendants have not established a serious question to be tried.
The plaintiffs’ further argument, however, is that the plaintiffs’ signatures on the respective documents were extracted in circumstances where equity will intervene because of a failure on the part of the defendants to identify and to explain what the plaintiffs claim are unusual terms or clauses in the respective documents. The plaintiffs depose to the fact that they did not, by signing the documents, understand that they were creating a charge over their own property, and that they did not intend to do so. They also allege that they were induced to sign the documents by misleading and deceptive conduct on the part of the defendants. It is not necessary to recite the detail of what each plaintiff has said in that regard.
The vitiating circumstances were described by Mr Rochow as follows:
[T]here were unusual terms that were more onerous than one would expect in either a franchise agreement or a guarantee that had the effect of charges and also the abandonment of rights on the part of the guarantor, giving rise to caveats that could be sustained after that abandonment of all rights that were not drawn to their attention….
He also submitted that there was an evidential burden on the defendants which they had failed to discharge, and that upon the application of the principle in Jones v Dunkel,[47] an inference favourable to the plaintiffs should be drawn where there was just a general denial of their allegations on behalf of the defendants.
[47] (1959) 101 CLR 298.
The plaintiffs rely on the principle identified by Gibbs CJ in Commercial Bank of Australia Ltd v Amadio:[48]
A contract of guarantee is not uberrimae fidei. The principles governing the extent to which a creditor is bound to make disclosure to a surety were stated in Hamilton v. Watson. Lord Campbell there said that, unless questions are particularly put by the surety, a creditor taking a guarantee is not bound to make disclosure of material facts. He continued:
" . . . I should think that this might be considered as the criterion whether the disclosure ought to be made voluntarily, namely, whether there is anything that might not naturally be expected to take place between the parties who are concerned in the transaction, that is, whether there be a contract between the debtor and the creditor, to the effect that his position shall be different from that which the surety might naturally expect; and, if so, the surety is to see whether that is disclosed to him. But if there be nothing which might not naturally take place between these parties, then, if the surety would guard against particular perils, he must put the question, and he must gain the information which he requires."
In other words, a bank which takes a guarantee "is only bound to disclose to the intending surety anything which has taken place between the bank and the principal debtor 'which was not naturally to be expected', or as it was put by Pollock M.R., in Lloyds Bank Ltd. v. Harrison 'the necessity for disclosure only goes to the extent of requiring it where there are some unusual features in the particular case relating to the particular account which is to be guaranteed'". The reason why a creditor is bound to reveal to an intending surety anything in the transaction between himself and the debtor which the surety would expect not to exist is that a failure to make disclosure in those circumstances would amount to an implied representation that the thing does not exist. [49] [Footnotes and references omitted].
[48] (1983) 151 CLR 447.
[49] Ibid 454-455. Mason J identified the same principle at 463.
While that principle formed the basis of the decision of the Chief Justice to set aside the guarantee in Amadio, it was not the basis on which Mason, Wilson and Deane JJ decided the case. They considered that the guarantors were under a special disability when they executed the deed, and that their disability was sufficiently evident to the bank to make it unfair or unconscientious for the bank to be allowed to rely on the guarantee.
The plaintiffs also relied on a further passage in the judgment of Young CJ in Eq in Iaconis v Lazar:[50]
The probabilities would be that if the facts show that there is a pro forma document and a person of limited commercial experience has signed it without evidence being proffered by the lender that the clause has been properly explained to the person who is said to have given the charge by or on behalf of the person providing the financial benefit, that the court may very well come to the conclusion that the former person never intended to give a charge notwithstanding the words used in the document.
[50] (2007) 13 BPR 24,937; [2007] NSWSC 1103 at 24,941; [24].
Even if the principle relied on by Gibbs CJ in Amadio is adopted here, it remains an open question in relation to each of the plaintiffs as to whether the creation of the equitable charge was an unusual feature relating to the particular transactions being guaranteed. That is a matter for trial and cannot be determined in these proceedings, as is the question whether the defendants were guilty of misleading and deceptive conduct whereby the plaintiffs or any of them were induced to enter into the respective agreements. As for the inferences which the plaintiffs argue should be drawn by the failure of the defendants to file answering affidavits from persons who might be expected to have personal knowledge of the facts, rather than relying on a general denial of the plaintiffs’ allegations, that failure does not go to the question of the defendants’ alleged failure to disclose unusual features of the transactions. The plaintiffs’ reliance on Jones v Dunkel[51] is misconceived in that regard. It might have had some relevance had the case in respect of the eighth and ninth plaintiffs proceeded beyond the question of material misdescription in the caveats. They have alleged economic duress on the part of the defendants as well as non-disclosure of unusual terms. However, in the events which have happened, that is no longer relevant. The caveats over their land were ordered to be removed upon the concession by the defendants of their invalidity.
[51] (1959) 101 CLR 298.
The passage relied on by the plaintiffs in the judgment of Young CJ in Eq in Iaconis v Lazar must be read in its proper context. His Honour was there referring to a case where an equitable charge was said to be created where the agreement merely provided that one party could lodge a caveat over the property of another. A person of limited commercial experience might well not understand from such a provision that a charge was created. However, that is not this case. The contractual provisions provide expressly for the creation of a charge over the party’s property, both real and personal, as security in favour of the relevant defendant.
There is no evidence that the contractual provisions creating the charge were specifically brought to the attention of any of the plaintiffs. Even if it were to be held that such provisions were an unusual feature of the transaction to which attention must be drawn, the response of the defendants is to point to the fact that all plaintiffs were advised in writing, before signing any documents, to obtain legal, business and accounting advice and to be satisfied as to the terms of the relevant guarantee. Documents were signed by the plaintiffs acknowledging an opportunity to obtain a proper understanding of the nature and effect of the documents, and that they had received all relevant disclosure documents. They signed acknowledgements that they had chosen not to seek such advice. In one case, that of the plaintiff Ms Donachie, the plaintiff had acknowledged having obtained legal advice as to the contents of the document, and the documentation included a certificate from the solicitor to the effect that the plaintiff had understood the nature and effect of the document.
In those circumstances the defendants relied on the decision in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd.[52] In that case a person signed a document which was intended to affect legal relations and knew that it contained contractual terms. There was no suggestion of a vitiating element, such as misrepresentation, duress or mistake and no claim for equitable or statutory relief. It was held that, in such circumstances, the person was bound by those terms, and it was immaterial that the person had not read the document. In their joint judgment, Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said:
[52] (2004) 219 CLR 165.
Consistent with this objective approach to the determination of the rights and liabilities of contracting parties is the significance which the law attaches to the signature (or execution) of a contractual document. In Parker v South Eastern Railway Co, Mellish LJ drew a significant distinction as follows:
"In an ordinary case, where an action is brought on a written agreement which is signed by the defendant, the agreement is proved by proving his signature, and, in the absence of fraud, it is wholly immaterial that he has not read the agreement and does not know its contents. The parties may, however, reduce their agreement into writing, so that the writing constitutes the sole evidence of the agreement, without signing it; but in that case there must be evidence independently of the agreement itself to prove that the defendant has assented to it."
More recently, in words that are apposite to the present case, in Wilton v Farnworth Latham CJ said:
"In the absence of fraud or some other of the special circumstances of the character mentioned, a man cannot escape the consequences of signing a document by saying, and proving, that he did not understand it. Unless he was prepared to take the chance of being bound by the terms of the document, whatever they might be, it was for him to protect himself by abstaining from signing the document until he understood it and was satisfied with it. Any weakening of these principles would make chaos of every-day business transactions."
In Oceanic Sun Line Special Shipping Company Inc v Fay, Brennan J said:
"If a passenger signs and thereby binds himself to the terms of a contract of carriage containing a clause exempting the carrier from liability for loss arising out of the carriage, it is immaterial that the passenger did not trouble to discover the contents of the contract."
It should not be overlooked that to sign a document known and intended to affect legal relations is an act which itself ordinarily conveys a representation to a reasonable reader of the document. The representation is that the person who signs either has read and approved the contents of the document or is willing to take the chance of being bound by those contents, as Latham CJ put it, whatever they might be. That representation is even stronger where the signature appears below a perfectly legible written request to read the document before signing it.[53] [References omitted].
[53] Ibid 180-181; [42]-[45].
The defendants are only required to establish a serious question to be tried in order to maintain their caveats. In my opinion, they have done so by reference to the content of the written agreements, notwithstanding that some or all of the plaintiffs may have been unaware that the agreements contained such a charging clause. Whether or not some or all of the plaintiffs succeed is a matter to be determined at the trial of the proceedings which they have commenced in the Federal Court. They have failed to displace the argument that there is a serious question to be tried.
The balance of convenience
If the caveats are removed, the defendants will run an obvious risk of losing their security if the respective properties are sold or otherwise encumbered. Some of the plaintiffs, where there may be significant equity in the land, may have restricted access to use of the land as security to raise money for the purpose of conducting their business or of prosecuting their claims in the Federal Court against the defendants. I am satisfied, however, that the caveats, either by their own terms or by virtue of the legislation which supports them are permissive in the sense that the caveator cannot prevent dealings in the land which are expressed to be subject to the rights of the caveator.
If, as a result of the caveat, a particular plaintiff encounters difficulty as to the continued funding of the business or of the Federal Court litigation, it is open to him or her to make a further application based on their particular circumstances. If there is merit in the argument, it is not beyond the power of this Court to craft an order removing the caveat but protecting the caveator’s interest by an injunction which, if the merits require, would allow the plaintiff controlled access to the property for security for some borrowings.
Any lack of action on the part of the defendants to seek to prove their equitable charge was said to prejudice the plaintiffs. However, that does not affect the existence or validity of the debt which is claimed by the defendants and which will remain the subject of the charge if the debt and the validity of the charge are established.

In my opinion this is one of those cases where, having found that there is a serious question to be tried as to the validity of the underlying charge, the balance of convenience naturally falls rather heavily in favour of the caveators.
As to other possible discretionary circumstances affecting the application for removal, the defendants, by their counsel, have indicated a willingness to proffer an undertaking as to damages. Upon such undertakings being given, I do not consider that there is any other disqualifying feature which would require that the caveats be removed.
Conclusion
The defendants’ application to transfer these proceedings to the Supreme Court of Victoria is refused.
In respect of the six caveats that I have identified as being defective, it is appropriate in all the circumstances that I give the relevant defendants an opportunity to apply for an order that the relevant caveats be amended. Upon the defendants giving the usual undertaking as to damages, I give liberty to the defendants to so apply within a period of 14 days from today. If no such application is made or if for some other reason it is refused, the relevant plaintiff or plaintiffs will have liberty to renew their application for removal of the relevant caveat on not less than 48 hours notice to the relevant defendant. In respect of the remaining caveats, upon the defendants giving the usual undertaking as to damages, I make no order on the plaintiffs’ application for removal.
I make these orders on the basis of the information presently before me. It does not include the nature of any defence filed or to be filed in the Federal Court proceedings by the defendants. If it should appear in those proceedings that, for some reason, the defendants no longer rely on or seek to enforce the charges that they claim, the plaintiffs may renew their present application. I therefore grant liberty to the plaintiffs to apply as they may be advised.
I will hear the parties as to the costs of the proceedings to date.