McCorry v Lorimer
[2021] WASC 311
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: MCCORRY -v- LORIMER [2021] WASC 311
CORAM: ACTING MASTER STRK
HEARD: 17 JUNE 2021
DELIVERED : 14 SEPTEMBER 2021
FILE NO/S: CIV 1304 of 2021
MATTER: Transfer of Land Act 1893 Sections 138B and 138C
BETWEEN: JOHN MCCORRY
Plaintiff
AND
JEFFREY PETER LORIMER
IRENE LEONORA LORIMER
First Defendants
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Real property - Caveat - Application to extend - Sale of land - Interest claimed as purchaser of the fee simple - Serious question to be tried - Balance of convenience - Turns on own facts
Legislation:
Transfer of Land Act 1893 (WA)
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | M Curwood SC |
| First Defendants | : | M R Collins |
| Second Defendant | : | No Appearance |
Solicitors:
| Plaintiff | : | Frichot Lawyers |
| First Defendants | : | H Kremer & Co |
| Second Defendant | : | Not Applicable |
Cases referred to in decision:
Bride v Registrar of Titles [2015] WASC 11
Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129
Khoury v Government Insurance Office of New South Wales (1984) 165 CLR 622
Love v Simmons [2016] WASCA 176
Mario Casella & Sons Builders Pty Ltd v Duckworth [2005] WASC 245
Nigel Watts Fashion Agencies Pty Ltd v GIO General Ltd (1994) 8 ANZ Insurance Cases 61-235
Perri v Collangatta Investments Pty Ltd (1982) 149 CLR 537
Sargent v ASL Developments Ltd (1974) 131 CLR 634
Shepherd & Anor v Baster [2006] WASC 176
Simmons v Love [2015] WASC 79
Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd and Ors (2005) 30 WAR 290
Yaran Holdings Pty Ltd v Goldsmith 7 Pty Ltd [2014] WASC 171
ACTING MASTER STRK:
By an originating summons filed on 16 April 2021, the plaintiff seeks the extension of the operation of a caveat (Caveat 0674100) lodged by him on 17 March 2021, claiming an interest in the property situated and known as 33 Brindabella Crescent, Halls Head (the Halls Head property). The application is made under s 138C of the Transfer of Land Act 1893 (WA).
The first defendants are the registered proprietors of the Halls Head property. By the caveat, the plaintiff claims an interest in the Halls Head property as the purchaser of the fee simple. While an interim order was made with the consent of the first defendants on 19 April 2021 extending the operation of the caveat until further order of the court, the application is substantively opposed by the first defendants. In summary, the contest between the parties is whether the contract of sale between the plaintiff (as Buyer) and first defendants (as Seller) remains in force. The second defendant is the Registrar of Titles and has not filed an appearance in the proceeding.
For the reasons set out below, I find that it is appropriate that the application be granted. The interim order of Master Sanderson extending the operation of the caveat until further order of the court should not be disturbed.
The evidence
In support of the application the plaintiff relies on his affidavit sworn on 15 April 2021; the affidavit of Roy Barraclough, real estate agent employed by LJ Hooker Kwinana, sworn on 28 April 2021; and the further affidavit of Mr Barraclough sworn on 1 June 2021. The application was filed with a memorandum of conferral pursuant to the Rules of the Supreme Court 1971 (WA) O 59 r 9, and an undertaking as to damages given by the plaintiff dated 15 April 2021.
The first defendants rely on the affidavit of the first named first defendant sworn on 10 May 2021; and the affidavit of Beverley Chadwick, a real estate sales representative of The Agency Mandurah, sworn on 12 May 2021.
The parties also rely upon their respective written submissions exchanged and filed on 14 June 2021.
The factual background
At the hearing, evidence was adduced on affidavit without the cross-examination of the deponents. There are many conflicts of evidence. I have not attempted to determine disputed questions of fact. I set out below a chronology of events and where accounts conflict, I note the same.
The Halls Head contract
On 1 January 2021, the plaintiff and first defendants entered into a written agreement by which the plaintiff offered to purchase the Halls Head property '… at the Purchase Price on the terms set out in the Schedule, the Conditions and the Special Conditions' (the Halls Head contract), and the first defendants accepted the plaintiff's offer.[1] The reference to the capitalised term 'Conditions' in the Halls Head contract was a reference to the 2018 Joint Form General Conditions for the Sale of Land. The Purchase Price was described in the Schedule to be $970,000, and the Settlement Date was described as being on or before 4 March 2021. The Finance Clause in the Schedule was stuck through.
[1] Affidavit of J McCorry par 6, 'JM-2'; affidavit of J Lorimer par 6; affidavit of B Chadwick 'BC-2'.
The Special Conditions described in the Schedule included the following:
(1)The Seller agrees to transfer the jetty licence to the buyer at the buyer's expense upon successful settlement.
(2)This offer is subject to the successful settlement of the buyer's property at 724 Warton Road, Treeby which is expected to be unconditional by 22/1/21 and expected to settle on or before 4th March 2021. Both settlements to coincide.
The Treeby contract
At the time the plaintiff entered into the Halls Head contract, the plaintiff was the registered proprietor of a property situated and known as 724 Warton Road, Treeby (the Treeby property). The plaintiff deposes that the second Special Condition reproduced above at [9] (Special Condition (2)) was inserted into the Halls Head contract at his request following a conversation with the first defendants' selling agent.[2]
[2] Affidavit of J McCorry par 15.
On 18 December 2020 (that is, before entering into the Halls Head contract), the plaintiff had entered into a written agreement titled 'Contract for the Sale of Land or Strata Title by Offer and Acceptance' (the Treeby contract), by which Paulose and Sini Varghese offered to purchase the Treeby property, and the plaintiff accepted their offer.[3] The Settlement Date was described to be on or before 4 March 2021. The finance clause was marked as being applicable to the Treeby contract, and provided that the latest time for the buyers to obtain finance approval was 4.00 pm, 35 days from acceptance (that is, by 4.00 pm on 22 January 2021).
[3] Affidavit of J McCorry pars 13 - 14, 'JM-4'; first affidavit of R Barraclough pars 5 - 6, 'RB-1'.
A copy of the Treeby contract was provided to Ms Chadwick, the first defendants' selling agent, by email on 18 December 2021.[4]
[4] Affidavit of B Chadwick par 7, 'BC-1'.
Ms Chadwick deposes to having been informed by the plaintiff that he would be unable to purchase the Halls Head property without having the funds available from the sale proceeds of the Treeby property. She further deposes that she had been informed by Renee Hardman, the principal of The Agency, Mandurah, that the first defendants needed the sale of the Halls Head property to settle by the end of March 2021.[5]
[5] Affidavit of B Chadwick pars 7.9 - 7.11.
Ms Chadwick deposes that she had been told by Mr Barraclough that the plaintiff and the buyers of the Treeby property had entered into an agreement to extend the date for finance approval from 22 January 2021 to 5 February 2021.[6] This extension was not referenced by the plaintiff nor Mr Barraclough in their affidavits.
Communications on or about 29 January 2021
[6] Affidavit of B Chadwick par 8.1, 'BC-3'.
Mr Barraclough, a real estate agent employed by LJ Hooker Kwinana, was engaged by the plaintiff to market and sell the Treeby property.[7] Mr Barraclough deposes that on 29 January 2021, he was informed by Paulose Varghese that the buyers had failed to obtain finance approval, and Mr Barraclough informed the plaintiff of the same.[8]
[7] Affidavit of J McCorry par 6; first affidavit of R Barraclough par 4.
[8] Affidavit of J McCorry par 17, 'JM-5'; first affidavit of R Barraclough pars 8 - 10, 'RB-2'.
On or around 29 January 2021, Mr Barraclough also informed the plaintiff that another person was interested in purchasing the Treeby property; but that an offer to purchase the Treeby property had not yet been presented as that person was still awaiting information concerning the Treeby property to be provided by the City of Cockburn.[9]
[9] Affidavit of J McCorry par 19; first affidavit of R Barraclough par 11.
Ms Chadwick deposes that she received an email communication from Mr Barraclough on 29 January 2021 attaching a copy of the finance refusal addressed to Mrs Varghese.[10]
[10] Affidavit of B Chadwick par 8.2, 'BC-4'.
The plaintiff deposes as follows.[11]
By telephone, I informed Beverley Chadwick of the Agency that the Treeby Contract had fallen through however there was another person interested in purchasing the Treeby Property and that I would still proceeding (sic) with my purchase of the Halls Head Property.
[11] Affidavit of J McCorry par 20; affidavit of B Chadwick par 10.
On 29 January 2021, Mr Barraclough received an email communication from Ms Chadwick in the following terms:[12]
Hi Roy
I spoke to John and he said that he still wants to go ahead as you have another purchaser for his home
Can you please clarify so I can let the owners know
Communications on or about 1 February 2021
[12] First affidavit of R Barraclough pars 13 - 14, 'RB-3'; affidavit of J McCorry pars 21 - 22; affidavit of B Chadwick par 10.
Mr Barraclough deposes that following receipt of the email, on or around the same day, he telephoned Ms Chadwick and told her words to the effect that there was another person interested in purchasing the Treeby property and that he was informed by the plaintiff that he intended to proceed with settlement of the Halls Head property and that he was in the process of arranging bridging finance.[13] Based on Mr Barraclough's telephone records, in his second affidavit, Mr Barraclough deposes to his belief that he had two conversations with Ms Chadwick, on 1 February 2021 and 17 February 2021.[14]
[13] First affidavit of R Barraclough par 15; first affidavit of J McCorry par 23.
[14] Second affidavit of R Barraclough pars 7 - 8; ts 4 (17 June 2021).
In response to Mr Barraclough's evidence, Ms Chadwick deposes that Mr Barraclough returned her telephone call on 1 February 2021 and told her that there was a buyer that could be interested in purchasing the plaintiff's property but that he had not been able to get the buyer to commit in writing. She further deposes that Mr Barraclough told her that he would provide her with a copy of the contract for the sale of the Treeby property as soon as he was able to do so.[15]
[15] Affidavit of B Chadwick par 11.1.
Ms Chadwick denies that she was informed by Mr Barraclough that the plaintiff had informed him that 'he intended to proceed with settlement of the Halls Head property'. She deposes that instead, Mr Barraclough told her that the plaintiff would like to proceed with the purchase the Halls Head property if he was able to do so. The plaintiff however was not in a position to do so.[16]
[16] Affidavit of B Chadwick par 11.6.
The plaintiff deposes that he had a telephone conversation with Ms Chadwick in early February 2021 during which time Ms Chadwick said words to the effect that the Halls Head contract was 'still going until 4 March 2021'.[17] Ms Chadwick deposes that the only conversation she had with the plaintiff was on 29 January 2021, and has no recollection of having said the words attributed to her by the plaintiff.[18]
Communications on or about 5 February 2021
[17] Affidavit of J McCorry par 24.
[18] Affidavit of B Chadwick par 17.2.
Ms Chadwick deposes that she telephoned Mr Barraclough on 5 February 2021 and was told by him that the buyer for the Treeby property had still not provided the plaintiff with a written offer to purchase. Ms Chadwick further deposes that she reminded Mr Barraclough that the special condition initially required the sale of the plaintiff's property to be unconditional by 22 January 2021 and that the first defendants had already agreed to extend the state to 5 February 2021.[19]
[19] Affidavit of B Chadwick par 11.2.
By her affidavit, Ms Chadwick denies having been told on 5 February 2021, or any time before 18 March 2021, that the plaintiff was in the process of arranging bridging finance.[20]
[20] Affidavit of B Chadwick par 11.7.
Based on Mr Barraclough's telephone records he deposes to his belief that he had two conversations with Ms Chadwick, on 1 February 2021 and on 17 February 2021.[21]
Communications on or about 9 February 2021 and the further marketing of the Halls Head property
[21] Second affidavit of R Barraclough pars 7 - 8; ts 4 (17 June 2021).
Ms Chadwick deposes that on 9 February 2021, she telephoned Mr Barraclough and again was told that the plaintiff was still not in a position to fulfil the special condition in that his prospective buyer was still not prepared to commit to purchasing the Treeby property.[22]
[22] Affidavit of B Chadwick par 11.3.
The first named first defendant deposes that after becoming aware from his selling agents that the plaintiff was unable to proceed with the purchase of the Halls Head property without funding from the sale of the Treeby property, the first defendants provided instructions to their selling agents to find another buyer for their property.[23]
[23] Affidavit of J Lorrimer par 19.
Ms Chadwick deposes that hearing no further from Mr Barraclough nor the plaintiff, the Halls head property was again placed on the market for sale on or about 12 February 2021.[24] Ms Chadwick further deposes that at no time was she informed by Mr Barraclough nor the plaintiff that the plaintiff was able or prepared to unconditionally proceed with the purchase of the Halls Head property without funding from the sale of the Treeby property.[25]
[24] Affidavit of B Chadwick par 11.4.
[25] Affidavit of B Chadwick par 11.5.
On 17 February 2021, the first defendants accepted an offer from Ms Primerano, a third party, and entered into a contract for the sale of the Halls Head property.[26]
[26] Affidavit of J Lorimer 'JPL-5'; affidavit of B Chadwick 'BC-5'.
As noted above, based on Mr Barraclough's telephone records, he deposes to his belief that he had two conversations with Ms Chadwick, on 1 February 2021 and 17 February 2021.[27] Mr Barraclough's evidence is that the duration of each of these telephone calls was approximately ten minutes each and that he recalls during each of these telephone conversations that he told Ms Chadwick that he was informed by the plaintiff that he wanted to proceed with settlement of the Halls Head property and that he was in the process of arranging a bridging loan.[28]
Communications on or about 22 February 2021
[27] Second affidavit of R Barraclough par 7 - 8; ts 4 (17 June 2021).
[28] Second affidavit of R Barraclough par 7.
The plaintiff deposes that on 22 February 2021, Ms Chadwick telephoned him and said to him words to the effect that the Halls Head property was sold to another person as the Halls Head contract had fallen through as the Treeby contract was not proceeding.
The plaintiff further deposes that he is unsure whether it was during the same conversation or a different conversation with Ms Chadwick that Ms Chadwick said to him words to the effect that the Halls Head contract had fallen through as the Treeby contract was not proceeding and that she felt sorry for him as she knew how much he loved the Halls Head property, to which the plaintiff said to Ms Chadwick that he was still going ahead with settlement of the Halls Head property as he had several other parties interested in buying the Treeby property.[29]
[29] Affidavit of J McCorry par 25.
The plaintiff deposed that he wanted to review the Halls Head contract to better understand what Ms Chadwick had said to him. He deposes that he did not have a copy so requested it from Ms Chadwick.[30]
[30] Affidavit of J McCorry par 26.
The plaintiff deposes that instead of being provided with a copy of the Halls Head contract, on 22 February 2021 he received an email communication from Ms Chadwick attaching a document titled 'Mutual Termination Agreement'.[31] In the email communication, Ms Chadwick simply states:
Mutual agreement form to be signed please and returned
Many thanks
The email communication was sent to Mr Barraclough and copied to the plaintiff.
[31] Affidavit of J McCorry pars 27 - 28, 'JM-7'; first affidavit of R Barraclough pars 16 - 17, 'RB-4'.
The plaintiff deposes that he did not at any time prior to receipt of the email request the document attached, nor had Ms Chadwick or anyone else acting for and on behalf of the first defendants or The Agency discussed a document of that nature with him.[32] The plaintiff deposes that he did not sign the document and did not agree to or otherwise communicate to Ms Chadwick or to any other person at that time, or indeed any time earlier, that he wished to terminate or end the Halls Head contract.[33] Save for receipt of the Mutual Termination Agreement, which he did not sign, the plaintiff says he did not receive any default or other notice relating to the Halls Head contract.[34]
[32] Affidavit of J McCorry par 27, 'JM-7'.
[33] Affidavit of J McCorry par 29.
[34] Affidavit of J McCorry par 66.
Mr Barraclough deposes that he did not respond to Ms Chadwick's communication of 22 February 2021.[35]
[35] First affidavit of R Barraclough par 18.
Ms Chadwick deposes that she was not told that the plaintiff had refused to sign the Mutual Termination Agreement or his reasons for not signing until receipt of a letter dated 18 March 2021 from the plaintiff's solicitors.[36]
[36] Affidavit of B Chadwick par 21.
The first named first defendant deposes that he was also not aware that the plaintiff had not signed the Mutual Termination Agreement. Further, he deposes that it was his understanding that the mutual termination agreement did no more than record what was agreed at the time, namely that the plaintiff was not in a position to complete the purchase of the of the Halls Head property and that the first defendants acknowledged and accepted that the plaintiff was not required to complete the purchase.[37]
[37] Affidavit of J Lorimer pars 20.3 - 20.4.
The plaintiff deposes that on the same day (22 February 2021), he checked a realty website and noticed that the Halls Head property had been placed on the market for sale.[38]
Communications on or about 23 February 2021
[38] Affidavit of J McCorry par 30.
The plaintiff deposes that he telephoned Ms Chadwick on 23 February 2021 to follow-up on his request for a copy of the Halls Head contract; and Ms Chadwick forwarded a copy to the plaintiff on the same day.[39]
[39] Affidavit of J McCorry par 31 - 32, 'JM-8'.
The plaintiff deposes that on 23 February 2021 he checked the realty website to see if there had been any changes to the Halls Head property from the day before and noticed that the property was 'under offer' to someone else.[40]
[40] Affidavit of J McCorry par 33.
The plaintiff deposes that at his request and instruction, his sister then sent an email communication on his behalf to Renee Hardman, another sales representative at The Agency.[41] The email communication included the following statement:
We have been advised that the actions you have taken are in Breach of Conduct and that we are still under contract until the 4th March 2021.
With consideration to the 5 days of Covid shut down.
We have another offer signed just waiting council clarification on setbacks. We are hoping to advance with the settlement with all parties staying respectful.
[41] Affidavit of J McCorry pars 34 - 36, 'JM-9'.
On 23 February 2021, Ms Hardman sent an email communication to the plaintiff copied to Ms Chadwick in the following terms:[42]
[42] Affidavit of J McCorry 'JM-10'.
Dear John,
You are due to settle on 33 Brindabella Cres on the 4th of March and after discussions with your agent he advised that no other contract had been signed as yet and if it eventually gets accepted, it also is subject to finance with a 28 day finance clause which would ultimately take you way past the 4th March settlement date.
In no way has Bev acted inappropriately and in fact gave you another 2 week extension on the first contract which was to no avail.
We have continually requested a copy of the second contract and to this date nobody has been willing to provide us with this. Bev has been in constant contact with your agent as she did not want you to lose the home either.
As a result the seller has asked us to put the property back on the market to accept another offer, which we have done. He cannot afford to wait for a 'what if' or maybe. I'm sure you appreciate that.
Unless you can show that your home is in fact sold and that you are ready willing and able to settle on the property on the 4th March we will be proceeding with the second offer under instruction from our seller.
…
Communications on or about 24 - 25 February 2021
The plaintiff deposes that on or about 24 February 2021, he made enquiries as to whether he would qualify for bridging finance so that he could proceed with settlement of the Halls Head property. He further deposes that on 25 February 2021, he was informed by a mortgage broker that he qualified for bridging finance and that he would be able to secure such finance in a short timeframe so as to be in a position to settle on the Halls Head property on the Settlement Date.[43]
[43] Affidavit of J McCorry pars 38 - 41, 'JM-11'.
On 24 February 2021, Mr Barraclough received an email communication from Ms Chadwick in the following terms:[44]
Dear Roy
What is the likely hood of John being able to settle his property on the 4th March ?????
My principal has asked me to ask the question
[44] First affidavit of R Barraclough pars 20 - 21, 'RB-5'.
Mr Barraclough deposes that following receipt of Ms Chadwick's email communication he rang Ms Chadwick and told her that he was informed by the plaintiff that he had made arrangements for bridging finance and was intending to proceed with settlement of the Halls Head property on 4 March 2021.[45]
[45] First affidavit of R Barraclough par 22.
The plaintiff also deposes that on or around 'that time', he also informed Ms Chadwick by telephone that he had obtained bridging finance and was in a position to settle on the purchase of the Halls Head property on the Settlement Date.[46]
[46] Affidavit of J McCorry par 44.
Ms Chadwick deposes that she did not receive telephone calls from either Mr Barraclough or the plaintiff at any time after 23 February 2021. She says that her email communication was not responded to and no mention was made of bridging finance at any time prior to receipt of a letter from the plaintiff's solicitors dated 18 March 2021.[47]
[47] Affidavit of B Chadwick pars 14, 18.3, 20; affidavit of J McCorry 'JM-15'.
On 25 February 2021, Ms Harman informed the plaintiff by email that the first defendants had accepted another purchaser's offer on the Halls Head property.[48] Ms Hardman's email communication, addressed to the plaintiff and copied to Ms Chadwick, states as follows:
Good morning John,
I have had a further look at the finance extension that was requested by yourself and unfortunately it clearly states an end date for the finance to be approved. A decline letter was then sent to us which meant the seller then had the right to put the property back on the market.
As a consequence we sent you a termination notice to say the contract was now over as is the sellers right to do. He has now received a cash offer because he was not willing to accept another finance offer due to the amount of time that had passed on your contract.
He has accepted this offer.
…
Communications on or about 2 March 2021 and lodgement of the plaintiff's caveat
[48] Affidavit of J McCorry 'JM-13'; affidavit of J Lorimer 'JPL-6'.
On or around 2 March 2021, the first defendants' agents contacted the plaintiff requesting that he provide bank account details to facilitate the return of his deposit. The details were not provided by the plaintiff and he did not respond to the first defendants' agents.[49] The deposit continues to be held in the trust account of the first defendants' selling agent.[50]
[49] Affidavit of J McCorry par 49; affidavit of J Lorimer 'JPL-8'; affidavit of B Chadwick par 22, 'BC-7'.
[50] Affidavit of J Lorimer par 20.11.
The first defendants and Ms Primerano then arranged to settle the sale of the Halls Head Property on 17 March 2021.[51]
[51] Affidavit of J Lorimer 'JPL-10'.
The plaintiff took legal advice and on the plaintiff's instructions, Caveat O674100 was lodged and registered on 17 March 2021.[52] The interest claimed is as the purchaser of the fee simple.
[52] Affidavit of J McCorry pars 51 - 52, 'JM-14'.
By letter dated 18 March 2021, the plaintiff's solicitors communicated that, among other things, the plaintiff was ready, willing, and able to perform his obligations under the Halls Head contract. The first defendants refused to proceed with settlement and requested that the caveat be withdrawn.[53]
[53] Affidavit of J McCorry 'JM-15'.
Ms Chadwick deposes that at no time prior to reading the letter dated 18 March 2021 was she aware from either Mr Barraclough or the plaintiff that the plaintiff was prepared to proceed to a settlement without the Special Conditions being fulfilled or otherwise prepared to proceed unconditionally with the purchase of the Halls Head property.[54] She further deposes that at no time did the plaintiff provide any notice that he was in a position to settle by the Settlement Date, or that he had the financial capacity to do so by that date.[55] The first named first defendant also deposes to having been unaware that the plaintiff was seeking or had secured bridging finance prior to receipt of the 18 March 2021 letter.[56]
[54] Affidavit of B Chadwick pars 15.3, 18.3.
[55] Affidavit of B Chadwick pars 15.4, 27.1 - 27.3.
[56] Affidavit of J Lorimer par 20.7.
On 18 March 2021, Ms Primerano's conveyancing agent sent a letter titled 'Interest Notice', claiming penalty interest of $237.95 per day from 17 March 2021 should settlement not proceed. [57] On 19 March 2021, Ms Primerano lodged and registered a caveat against the Halls Head Property. That caveat became known as Caveat O677182.[58]
[57] Affidavit of J Lorimer 'JPL-11'.
[58] Affidavit of J McCorry 'JM-16'.
On 26 March 2021, the first defendants' solicitors lodged an application to remove the plaintiff's caveat pursuant to s 138B of the Transfer of Land Act. A notice of the same was issued to the plaintiff on 29 March 2021.[59]
[59] Affidavit of J McCorry 'JM-17'.
The plaintiff subsequently commenced this proceeding, seeking that the operation of his caveat be extended.
The plaintiff deposes that had the first defendants been willing to settle on 4 March 2021, he would have proceeded to obtain finance approval such that he would have settled on that date, or if the first defendants had issued a default notice, then within the period of such default notice.[60]
[60] Affidavit of J McCorry par 68.
The plaintiff's position is that he is ready, willing and able to perform his obligations under the Halls Head contract and he wishes to proceed to settlement.[61] He further deposes that in the event that the caveat is extended, he intends to commence substantive proceedings seeking a declaration that he is entitled to become the registered proprietor of the Halls Head property pursuant to the Halls Head contract, and also an order for specific performance requiring the first defendants to settle under that contract.[62]
[61] Affidavit of J McCorry par 65.
[62] Affidavit of J McCorry par 71.
The first named first defendant deposes to having made, with the second named first defendant, a commitment to the first defendants' bank to reduce their group debt exposure by selling the Halls Head property by 31 March 2021.[63]
[63] Affidavit of J Lorimer pars 8 - 9.
On 19 April 2021, Master Sanderson made an order extending the operation of the plaintiff's caveat until further order of the court pursuant to s 138C of the Transfer of Land Act, and otherwise made programming directions to facilitate the substantive hearing of this application.
The applicable principles
The general principles relating to the extension of a caveat under the Transfer of Land Act s 138C are well established. They were summarised by Edelman J in Bride v Registrar of Titles,[64] as follows:
[64] Bride v Registrar of Titles [2015] WASC 11 [11] - [16].
Section 137 of the Transfer of Land Act 1893 (WA) enables a beneficiary or other person claiming an estate or interest in land to lodge a caveat. Section 138C(2) provides for the Supreme Court's powers when a caveator applies to the Supreme Court for an order extending the operation of a caveat, as follows:
(2)On the hearing of an application under subsection (1), the Supreme Court -
(a)if satisfied that the caveator's claim has or may have substance -
(i)may make an order extending the operation of the caveat for such period as is specified in the order; or
(ii)may make an order extending the operation of the caveat until the further order of the court; or
(iii)may make such other orders as it thinks fit concerning the caveat or the land in respect of which the caveat was lodged;
and
(b)if not satisfied that the caveator's claim has or may have substance, shall dismiss the application; and
(c)may make such ancillary orders in relation to the application as it thinks fit.
In assessing whether to grant the extension of the caveat the two broad issues are (1) whether the caveator's claim in respect of the estate or interest in land 'has or may have substance' and (2), whether the balance of convenience favours the retention of the caveat and the appropriate orders to be made.
The first issue is whether the caveator's claim in respect of the estate or interest in land 'has or may have substance'. This is sometimes expressed as whether the caveator can show that there is a serious question to be tried, or whether the caveator can prove a prima facie case. In assessing whether the caveator has proved that the claim has, or may have substance, the court does not ordinarily evaluate the plaintiff's evidence or undertake a preliminary trial.
The requirement that the caveator's claim of substance be in respect of a claim of an 'estate or interest in land' has been held to mean that the claim must concern a proprietary interest in land.
The second issue is the balance of convenience in extending the caveat. The court considers the balance of convenience when it decides whether to exercise its discretion to extend the caveat. The balance of convenience is not independent of the strength or weakness of the caveator's claim. Rather, the apparent strength or weakness of the case for relief at trial is a relevant consideration on the balance of convenience.
An important factor in considering the balance of convenience is if the failure to extend a caveat will have the effect of destroying, or substantially impairing, the benefit of the proprietary interest which is claimed. (footnotes omitted)
I adopt and apply these principles in determining the plaintiff's application. I also accept the submission made on behalf of the plaintiff that a caveat will not generally be removed pending trial unless it is 'patently clear' that the interest in the land sought to be protected cannot be made out.[65]
[65] Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129, 141;The proceeding to extend the operation of the plaintiff's caveat is interlocutory, and it is not appropriate to attempt to determine disputed questions of fact. However, in a case like the present it is necessary to carefully consider the contract to ascertain whether the interest claimed has or may have substance.[66]
[66] Yaran Holdings Pty Ltd v Goldsmith 7 Pty Ltd [42] (Allanson J).
The plaintiff's position
The plaintiff says that the questions to be tried in this case are as follows.
First, was the Halls Head contract 'automatically' terminated; and if not, were the first defendants entitled to unilaterally terminate the Halls Head contract upon the Treeby contract coming to an end?
Secondly, was Schedule Condition (2) for the exclusive benefit of the plaintiff and/or capable of waiver by the plaintiff, and if so, did the plaintiff in fact waive Schedule Condition (2), so that he was entitled to proceed to settlement of the Halls Head contract?
The plaintiff contends that his caveat should be extended because there is a serious question to be tried on his contention that the Halls Head contract remains a binding contract. I understand the plaintiff to submit that the non-satisfaction of Special Condition (2) did not automatically bring the contract to an end. I also understand the position of the plaintiff to be that Special Condition (2) was for the benefit of and capable of waiver by the plaintiff, and there is a serious question to be tried about whether the plaintiff in fact waived Special Condition (2).
In submissions made at the hearing of the application, counsel for the plaintiff referred to the decision of Perri v Collangatta Investments Pty Ltd (1982) 149 CLR 537, in which the High Court considered a contract for the sale of land, and in particular cl 6 of the special conditions which provided that 'This Contract is entered into subject to Purchasers completing a sale of their property at No. 9 Korokan Road, Lilli Pilli.'
In that case, the special condition was found to be a condition precedent to the performance of certain obligations of the parties under the contract, not a condition precedent to the formation of a binding contract.[67] The observation was made that it was a condition for the benefit of the purchasers, who were therefore entitled to waive it, but in that case, since there was no waiver before the proceedings were commenced, that question did not need to be further considered.[68]
[67] Perri v Collangatta Investments Pty Ltd 541 (Gibbs CJ); 552 (Mason J).
[68] Perri v Collangatta Investments Pty Ltd 543 (Gibbs CJ); 553 (Mason J), 553 (Brennan J), 560 (Wilson J).
Counsel for the plaintiff contends that the decision of the High Court in Perri v Collangatta Investments Pty Ltd supports the plaintiff's submission that properly construed, Special Condition (2) did not result in the automatic termination of the Halls Head contract; that the condition is a condition precedent to the performance of certain obligations of the parties under the contract; and that the condition was for the plaintiff's benefit.
Further, the plaintiff contends that that the affidavit evidence filed in this proceeding supports a finding that the plaintiff did not elect to terminate the Halls Head contract but rather he disavowed reliance on and waived Special Condition (2).[69] The plaintiff contends that waiver was first conveyed by the plaintiff to Ms Chadwick on or about 29 January 2021.[70]
[69] ts 11 (17 June 2021).
[70] This is a reference to the evidence of the plaintiff reproduced at [18] above.
In submissions made at the hearing of the application, counsel for the plaintiff also referred to the decision of the Court of Appeal in Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd and Ors (2005) 30 WAR 290.[71] At [35] - [53] of the decision, Steytler P considered the doctrine of election, which his Honour observed 'has been said to apply where a party makes a choice between two inconsistent legal rights, choosing to enjoy one and to surrender the other.'[72]
[71] Wiltrading (2005) 30 WAR 290, [2005] WASCA 106.
[72] Wiltrading [35], citing Sargent v ASL Developments Ltd (1974) 131 CLR 634, 641 (Stephen J).
Steytler P further observed that the 'operation of the doctrine requires both knowledge on the part of the elector and words or conduct sufficient to amount to the making of the election.'[73] As to the requirement of knowledge, his Honour stated that there is no doubt that, at least, 'full knowledge of the material facts' is required, and it may also be accepted that a party to a contract will be taken to know of the rights which it confers.[74]
[73] Wiltrading [35], citing Sargent v ASL Developments Ltd 642.
[74] Wiltrading [35], citing Sargent v ASL Developments Ltd 642, 645 (Stephen J, McTiernan J in agreement), 658 (Mason J); Khoury v Government Insurance Office of New South Wales (1984) 165 CLR 622, 633 - 634; Nigel Watts Fashion Agencies Pty Ltd v GIO General Ltd (1994) 8 ANZ Insurance Cases 75,638 (61-235) at 75649 - 75,650 (Handley JA).
As to the words or conduct necessary to give rise to an election, his Honour stated that 'the cases establish that, where an election is not shown to have been consciously made, the words or conduct relied upon to impute it must be unequivocal'.[75]
[75] Wiltrading [35], citing Sargent v ASL Developments Ltd 646 (Stephen J), Khoury v Government Insurance Office of New South Wales 633 (Mason, Brennan, Deane and Dawson JJ).
The plaintiff contends that the plaintiff's evidence of his statement to Ms Chadwick (reproduced above at [18]), and Mr Barraclough's evidence of his statement to Ms Chadwick (reproduced above at [20]), are words that give rise to an election to waive Special Condition (2), and are unequivocal. Counsel for the plaintiff submitted that the contract remained on foot and how the plaintiff was to fund the purchase price 'was his problem'.[76]
[76] ts 15 (17 June 2021).
The plaintiff submits that these matters give rise to a serious question to be tried, and further the balance of convenience lies with the plaintiff as a failure to extend the caveat will have the effect of destroying or substantially impairing the benefit of the proprietary interest claimed by the plaintiff. The plaintiff intends to commence proceedings to seek an order for specific performance of the Halls Head contract by the first defendants.
The first defendants' position
On behalf of the first defendants, the issues for determination were cast as follows.
First, what is the proper construction of Special Condition (2)?
The first defendants says that the following matters arise as sub-issues of the above:
(a)did the Halls Head contract terminate automatically upon Special Condition (2) not being satisfied?;
(b)were the first defendants entitled to terminate the Halls Head contract, and if so, did they terminate it?[77]
[77] ts 16 (17 June 2021).
Secondly, did the plaintiff waive Special Condition (2)?
Thirdly, was the plaintiff ready, willing and able to effect settlement on 4 March 2021?
Issue 1: The proper construction of the Halls Head contract
As to the proper construction of the Halls Head contract, the first defendants say that properly construed, Special Condition (2) is a condition that goes to the performance of the contract, not to the formation of a binding contract.[78] I do not understand the parties to differ in this regard.
[78] ts 17 (17 June 2021); first defendants' submissions par 52, citing Perri v Coolangatta Investments Pty Ltd 546 (Gibbs CJ).
The first defendants submit that Special Condition (2) properly construed is a 'non-promissory condition' or a 'contingent condition'.[79] They say that it is not framed as a promise by the plaintiff that he will sell the Treeby property by a fixed date, but rather it is framed by reference to an event - that is, the successful settlement of the Treeby property. Counsel submitted that Special Condition (2) is analogous to cl 6 of the special conditions considered by the High Court in Perri v Collangatta Investments Pty Ltd.
[79] ts 17 (17 June 2021); first defendants' submissions par 52, citing Perri v Coolangatta Investments Pty Ltd 551 - 552 (Mason J).
It is common ground that the Treeby contract did not settle. On behalf of the first defendants is submitted that Special Condition (2), properly construed, is an essential one.[80] Counsel for the first defendants further submit that as the condition is an essential one and the event did not occur (that is, there was no settlement of the Treeby contract), then upon the event not occurring, the Halls Head contract came to an end and the parties were thereafter relieved of their performance obligations.[81]
[80] ts 20 (17 June 2021), citing Perri v Coolangatta Investments Pty Ltd 554 (Mason J).
[81] ts 17, 20 (17 June 2021).
As to the plaintiff's submission that Special Condition (2) is for the plaintiff's benefit, counsel for the first defendants stated that the submission is not disputed, subject to this qualification.[82] It is submitted that Special Condition (2) is not solely for the plaintiff's benefit.[83] I understand the submission advanced to be that it can be construed that Special Condition (2) is for the benefit of both the buyer and the seller by reason of the inclusion of timeframes in the condition.[84]
[82] ts 18 (17 June 2021).
[83] ts 20 (17 June 2021).
[84] ts 20, 23 (17 June 2021).
The first defendants say that therefore, the non-fulfilment of the condition precedent rendered the Halls Head contract at an end, such that the first defendants were 'automatically' relieved from any future obligations.[85]
[85] ts 21, 22 - 23 (17 June 2021).
At par 58 of the first defendants' written submissions, it is noted that in Perri v Collangatta Investments Pty Ltd at 537, the majority said that when the time has elapsed for the performance of a condition precedent to the obligation to complete, either party, if not in default, can elect to treat the contract as at an end if the condition has not been fulfilled or waived, and it is not necessary first to give a notice calling upon the party to complete the contract or fulfill the condition.[86]
[86] Perri v Collangatta Investments Pty Ltd 545 - 546 (Gibbs CJ) and 569 - 570 (Brennan J).
The first defendant submits that as there is no evidence that the Treeby contract was unconditional by 22 January 2021, or at any other time, the first defendants were entitled to treat the Halls Head contract at an end by 9 February 2021 at the latest.[87]
[87] First defendants' submissions pars 59 - 61.
Counsel for the first defendant submitted that unless there has been some sort of effective waiver, the Halls Head contract was finished and nothing more on the part of the first defendants was required,[88] and therefore the plaintiff has no continuing caveatable interest in the Halls Head property.
[88] ts 21 (17 June 2021).
In the alternative, the first defendants say that if something further was required, then the evidence establishes that by on or about 9 February 2021, the first defendants (by their selling agent (the Agency) and settlement agent (Landmark Settlements Australia)) had informed the plaintiff (by his settlement agent (LJ Hooker Settlements)) that they had elected to treat the Halls Head contract as at an end. Alternatively, this was the effect of their conduct.[89]
[89] ts 25 (17 June 2021); the first defendants' submissions par 56 - 57; the affidavit of J Lorimer pars 15 - 19, 'JPL-3', 'JPL-4'.
The first defendants say that they thereafter became entitled to place the Halls Head property on the market for sale on or about 12 February 2021, and on 17 February 2021 they were entitled to accept an unconditional offer by another party to purchase the Halls Head property. They say in these circumstances, no formal Default Notice under the Conditions was required.[90]
[90] ts 27 (17 June 2021).
The first defendants say that re-marketing the Halls Head property for sale and entering into another contract for sale was conduct that demonstrated that the Halls Head contract was at an end, and as such the plaintiff has no continuing caveatable interest in the Halls Head property.[91]
Issue 2: Waiver
[91] ts 28 - 29 (17 June 2021).
I understand the position of the first defendants to be that when viewed objectively, the plaintiff did not waive Special Condition (2).[92] They rely on the written outline of submissions filed on their behalf, particularly pars 74 - 84, and the submissions made on their behalf at the hearing of this application.
[92] ts 25 (17 June 2021).
In summary, the first defendants say that there was no express nor implicit waiver of Special Condition (2) by the plaintiff. The first defendants contend that the communications of the plaintiff and his agent were not unequivocal: it was never communicated that 'the Halls Head contract was unconditional'.[93]
[93] ts 30 - 31(17 June 2021).
The first defendants submit that the statements attributed to the plaintiff and to Mr Barraclough do not convey that the plaintiff abandoned his right to rescind the Halls Head contract due to the non-fulfilment of Special Condition (2), by expressing the offer to purchase as being unconditional or otherwise.[94]
[94] ts 31 (17 June 2021).
The first defendants also point to two contextual matters to buttress their submission, both which concern the conduct of the plaintiff. It is submitted that the plaintiff, on his own evidence, did not take steps to arrange finance between 9 and 24 February 2021, and again not between 25 and 17 March 2021. It is submitted that in terms of waiver, given the plaintiff's inaction, the plaintiff had no ability to elect.[95]
Issue 3: was the plaintiff ready, willing and able to effect settlement on 4 March 2021?
[95] ts 33 (17 June 2021).
The first defendants submit that the plaintiff must be able to demonstrate that he is ready and willing and in a position to complete the performance of the contract in accordance with its terms properly construed, including an immediate ability to finance the purchase of the property: Love v Simmons [2016] WASCA 176 [43]; Simmons v Love [2015] WASC 79 at [96]-[119]; Shepherd & Anor v Baster [2006] WASC 176 at [88] - [98].
The first defendants say that the evidence discloses that the plaintiff was not ready, willing and able to settle by the Settlement Date (4 March 2021); nor by 17 March 2021, when the caveat over the title to the Halls Head property was registered; nor by 18 March 2021, when the first defendants received the letter from the plaintiff's lawyers, or otherwise within any reasonable extended time thereafter.
The first defendants submit that the following matters support this contention.
First, at the time of entry into the Halls Head contract, it was common ground that the plaintiff needed to sell the Treeby property to fund the purchase of the Halls Head property.
Secondly, the plaintiff did not apply for finance until about 24 February 2021.[96] The plaintiff says that his application for finance was approved on 25 February 2021 and relies on the document annexed to his affidavit as 'JM-11' in support of that contention.
[96] Affidavit of J McCorry pars 38 - 41.
The first defendants say that given that there were only three clear business days between Thursday, 25 February 2021 (when the plaintiff found out that he may be able to qualify for a bridging loan), and Thursday, 4 March 2021 (the Settlement Date), the plaintiff's assertion that he would have been able to apply for and secure a bridging loan and have his lender be in a position to be able to disburse the necessary funds to the first defendants by the Settlement Date, is totally unrealistic.
Further, the first defendants say that the plaintiff would not have had the benefit of the extended period of ten business days provided for in any Default Notice issued under the Halls Head contract (as was suggested at par 68 of the plaintiff's affidavit), as the first defendants were not obliged to issue such a notice.
Thirdly, the plaintiff relies on the document annexed to his affidavit as 'JM-11' as evidence of him having obtained finance to fund the purchase of the Halls Head property. 'JM-11' does not state the amount to be borrowed, nor the name of the borrower. There is, in effect, no evidence of the amount sought to be borrowed or who would be borrowing that amount. Further, 'JM-11' indicates that any such borrowing would be subject to particular conditions, including conditions as to LVR (loan value ratios). Those conditions are not stated, and nor is it in evidence that the plaintiff satisfied them. In the circumstances, the first defendants say that 'JM-11' does not assist the plaintiff at all.
Fourthly, the plaintiff did not at any time prior to 18 March 2021 provide any notice in writing that he was ready, willing and able to settle and at no time did either he nor any representative on his behalf comply with any of the requirements of par 3.1 to 3.6 or par 3.12 of the Conditions.[97]
[97] The first defendants reference the affidavit of J McCorry pages 38 - 39; and the affidavit of J Lorimer pars 21.1 - 21.8, 'JPL-9'.
Fifthly, the plaintiff states at par 69 of his affidavit that he 'did not press with obtaining finance approval from 25 February until on or about 17 March 2021'. The first defendants say that in effect, the plaintiff's statement is an admission that was not ready, willing and able to settle on 4 March 2021, or at any time, until at least 17 March 2021.
Sixthly, the plaintiff asserts at par 66 of his affidavit that he had finance approval in place and was in a position to settle 'if required'. He relies on the document annexed to his affidavit as 'JM-20' as evidence of finance approval. The first defendants say that four matters may be noticed about 'JM-20':
(a)the notice bears the date 29 March 2021, meaning that settlement could not occur earlier than that date (assuming it was valid, which the first defendants' do not accept);
(b)the notice names the borrower as McCorry Investments Pty Ltd. No explanation is given as to the significance of this. In effect, the plaintiff is not named as the borrower;
(c)no explanation is given as to how the company (that is, McCorry Investments Pty Ltd) would use the borrowed funds; and
(d)the loan was subject to several special conditions, the first of which required the lender to undertake 'satisfactory property research'. Further conditions are listed in the special conditions.
In summary, the first defendants contend that 'JM-20' is not evidence that the plaintiff had secured funding to purchase the Halls Head property.
Seventhly, there is some evidence to suggest that the plaintiff did not have finance as of 8 April 2021.[98]
[98] Affidavit of J Lorimer 21.7, 'JPL-7'.
Eighthly, the first defendants did not know that the plaintiff was trying to obtain finance until the receipt of the letter dated 18 March 2021.[99] The first defendants further say that they had no knowledge of the plaintiff filing a caveat over the Halls Head property or the plaintiff filing the Halls Head contract for stamping until receipt of the plaintiff's affidavit sworn 15 April 2021, or the documents required to effect transfer of the Halls Head property.[100]
Balance of convenience
[99] Affidavit of J McCorry page 90; the affidavit of J Lorimer pars 20.7 - 20.9.
[100] Affidavit of J Lorimer pars 21.1, 21.2, 21.5, and 'JPL-9'.
The first defendants further submit that the balance of convenience favours them, as the time and financial burden for substantive proceedings would only add to the existing detriments faced by them. (I understand those detriments to include those matters referred to at [13], [56] and [61] above.)
Further, the plaintiff delayed in seeking legal advice and in lodging the caveat for about a month. The first defendants say that in the exercise of discretion, the delay is a factor that ought to weigh against the plaintiff.
The first defendants contend that their case is the stronger on the merits. On the first defendants' analysis, the plaintiff has four hurdles to overcome. The plaintiff's weaker prospects, they say, must tilt the balance in their favour.
Disposition
As may be discerned from the above, detailed submissions were made on behalf of both the plaintiff and the first defendants as to the plaintiff's claim and whether it has substance.
I keep in mind the question to now be determined is whether the plaintiff has or may have a caveatable interest - if there is a serious question to be tried about whether the plaintiff has an interest in the Halls Head property as the purchaser of the fee simple, then (subject to the balance of convenience) the protection afforded by the caveat should be extended.
I also keep in mind that in assessing whether the plaintiff has discharged the onus of establishing that his claim has, or may have substance, the court does not ordinarily evaluate the plaintiff's evidence or undertake a preliminary trial.
Having regard to the submissions made by counsel, and giving careful consideration to the affidavit evidence and the authorities cited, I find that the plaintiff has discharged the onus of establishing that his claim may have substance.
I have understood it to be accepted between the parties that the usual principles of contractual construction ought to be applied in the construction of the Halls Head contract. Further, as to the proper construction of the Halls Head contract, I understand both parties to say that properly construed, Special Condition (2) is a condition that goes to the performance of the contract, not to the formation of a binding contract.
They are however at odds as to whether, properly construed, the Halls Head contract terminated automatically upon Special Condition (2) not being satisfied.
Having regard to the decision of the High Court in Perri v Collangatta Investments Pty Ltd, I accept that the plaintiff's submissions that it is arguable that properly construed, Special Condition (2) did not result in the automatic termination of the Halls Head contract; that the condition is a condition precedent to the performance of certain obligations of the parties under the contract; and that the condition was for the plaintiff's benefit.
Further, I am not satisfied that the first defendants' alternative submission (summarised at [92] - [94] above), that the first defendants' had elected to treat the Halls Head contract as at an end, is determinative of the application. I find that there is a question to be tried as to whether the first defendants were entitled to terminate the Halls Head contract, and if so, whether they did terminate it.
Having regard to the authorities cited, I find that there is a question to be tried as to whether Special Condition (2), properly construed, was a condition for the benefit of both parties (or just the plaintiff); and whether the first defendants were empowered to elect to treat the Halls Head contract as being at an end. Further, I consider that the question of whether the first defendants' conduct amounted to an election in circumstances where there had been no effective waiver by the plaintiff to be appropriately left to be answered after all the evidence has been led at trial.
As to the issue of waiver, as noted above, I find that there is a question to be tried as to whether Special Condition (2), properly construed, was a condition for the benefit of both parties (or just the plaintiff). It would appear to be common ground that the condition was a condition for the benefit of the plaintiff, even if there remains an issue as to whether the benefit extended to the first defendants.
I accept that there is sufficient evidence to ground a finding that there is a serious question to be tried that the plaintiff in fact waived Special Condition (2), first said to have been conveyed by the plaintiff to Ms Chadwick on or about 29 January 2021,[101] and then said to have been conveyed by Mr Barraclough to Ms Chadwick shortly thereafter.[102] It is not appropriate nor necessary for me to determine disputed questions of fact, preferring the evidence of the plaintiff and Mr Barraclough or the evidence of Ms Chadwick. The ultimate determination of whether the statements made by the plaintiffs and his agent amounted to affirmation sufficient to give rise to waiver must be left to be answered after all the evidence has been led at trial.
[101] This is a reference to the evidence of the plaintiff reproduced at [18] above.
[102] This is a reference to the evidence of Mr Barraclough summarised at [20] above.
I understand the first defendants to say that the plaintiff has not established on the evidence that he was ready, willing and able to settle on the Settlement Date, or at all. At least eight matters or submissions are agitated in the first defendants' submissions. Among other things, the first defendants submit that the plaintiff's assertion that he would have been able to apply for and secure a bridging loan and have his lender be in a position to be able to disburse the necessary funds to the first defendants by the Settlement Date, is totally unrealistic.
The submissions made on behalf of the first defendant are appropriately raised, but on balance, cannot be determinative of this application. The plaintiff's evidence is that he would have been ready on 4 March 2021, and he remains ready, willing and able to perform his obligations under the Halls Head contract. He annexes to his affidavit informal written confirmation that he had qualified for bridging finance and a formal loan offer. The plaintiff's evidence is not without any documentary foundation or explanation. It is sufficient to discharge his onus on this application.
On balance, I find that the plaintiff has established on his evidence a triable issue.
In all of the circumstances, I am satisfied that the plaintiff has discharged his onus to demonstrate that the caveatable interest he claims may have substance. The plaintiff has shown a sufficient likelihood of success in his claim (subject to the balance of convenience) to justify continuation of the caveat.[103] This is not a case where it is clear that the interest in land sought to be protected by the plaintiff cannot be made out. Rather, the plaintiff has shown a sufficiently high likelihood of success as to justify in the circumstances the preservation of the status quo.
Balance of convenience
[103] Yaran Holdings Pty Ltd v Goldsmith 7 Pty Ltd [70].
Turning now to the balance of convenience, I find that it favours extension of the operation of the caveat.
I have weighed in the balance the prejudice to the first defendants that will be caused by the continued operation of the caveat. The first defendant's evidence as to prejudice is compelling. The prejudice is considerable, and by reference to [56] above, in part readily quantifiable. The first defendants continue to have to meet their own borrowing obligations to their financier. They are liable for a daily default rate of interest under the contract they have entered into with Ms Primerano.
I have taken into account the undertaking proffered by the plaintiff, and I note that the substance of the undertaking proffered was not challenged.
I have weighed in the balance the fact that if the caveat is not extended, the plaintiff's interest in the Halls Head property as the purchaser of the fee simple will be lost. This weighs heavily in the balance. It is unusual to remove a caveat unless the claim appears to be without foundation.[104]
[104] Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd 48, and those cases cited at ft 65 above.
I have weighed in the balance the plaintiff's conduct, particularly in that period between the Treeby contract falling over on 29 January 2021 and 17 February 2021 (when the first defendants entered into a contract with Ms Primerano). I have focussed on this period as it would appear that the first defendants' position was fixed upon the signing of another contract for the sale of the Halls Head property on 17 February 2021. For the purpose of this application, proceeding on the basis of the plaintiff's evidence, I do not discern there to be delay or such unreasonableness of conduct on the part of the plaintiff that might tip the balance against the extension of the caveat.
Finally, I note that I have carefully considered the strengths and weaknesses of the plaintiff's case in considering the balance of convenience. On the first defendants' analysis, the plaintiff has four hurdles to overcome. While it would appear likely that at a trial, cogent arguments will be raised in defence of the plaintiff's claim, I do not evaluate the plaintiff's prospects to be so apparently weak as to tilt the balance of convenience in the first defendants' favour. In my view, the balance of convenience favours the extension of the caveat pending the determination of final relief as to the obligations and rights under the Halls Head Contract.
Conclusion and orders
For these reasons, I find that it is appropriate that the application be granted, and that the interim order of Master Sanderson extending the operation of the caveat until further order of the court should not be disturbed. I am not however prepared to make an order extending the caveat on an open-ended basis. The plaintiff says that he will commence proceedings. He must do so promptly and those proceedings ought be entered in the CMC List. I will hear from the parties as to the appropriate form of orders and as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MH
Associate to Justice Strk
14 SEPTEMBER 2021
Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42, 48; Mario Casella & Sons Builders Pty Ltd v Duckworth [2005] WASC 245 [26], as cited in the plaintiff's outline of submissions pars 25 - 26, ft 21. See also Yaran Holdings Pty Ltd v Goldsmith 7 Pty Ltd [2014] WASC 171 [43].
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