Land Law: Caveat Extensions in NSW Supreme Court

In a land law dispute, the NSW Supreme Court extended two caveats and allowed a fresh caveat to be filed, finding that there was a serious question to be tried and the balance of convenience favoured the claimant.

Supreme Court New South Wales

Medium Neutral Citation: [NAME] v [NAME] [2022] NSWSC 1785 Hearing dates: 14 December 2022; further written submissions 15 and 16 December 2022 Date of orders: 23 December 2022 Decision date: 23 December 2022 Jurisdiction: Equity - Duty List Before: Kunc J Decision: Two caveats in issue. One caveat extended. Leave granted to file a fresh caveat in relation to other caveat. Secured undertaking as to damages required. Catchwords: LAND LAW — Caveats — Extension of operation of caveat — Balance of convenience — Serious question to be tried — Undertaking as to damages LAND LAW — Caveats — Formal requirements — Requirement to specify particulars of estate or interest claimed — Where dropdown boxes on [NAME] do not permit interest to be described accurately — Whether description due to requirements of [NAME] a failure to comply with legislation which can be disregarded — Recommendation that [NAME] be changed to provide options which better describe trust claims — Real Property Act, 1900 (NSW), s 74L Legislation Cited: Real Property Act, 1900 (NSW) Real Property Regulation 2019 (NSW) NSW Conveyancing Rules Cases Cited: Australian Security Estates Pty Ltd v Bluecrest Holdings Pty Ltd (1999) 9 BPR 17, 533; [1999] NSWSC 524 Bale v Kimberley Development Pty Ltd [2022] NSWSC 820 [NAME] (NO 210) PTY LTD v Robert Ristevski [2022] NSWSC 821 Category: Procedural rulings Parties: [NAME] (First Plaintiff) [NAME] (Second Plaintiff) [NAME] (First Defendant) [NAME] (Second Defendant) [COMPANY] (Third Defendant) Representation: Counsel: [redacted] [NAME] SC with [NAME] ([NAME]) Solicitors: [redacted] [NAME] ([NAME]) File Number(s): 2022/297484 Publication restriction: Nil

Judgment

Summary 1. This judgment resolves an application brought under s 74K of the Real Property Act 1900 (NSW) (the Act) to extend two caveats (the Caveats). The Caveats have been lodged in the course of a farming family's intergenerational succession planning dispute. Without disrespect, I shall refer to the parties by their given names.

2. The first plaintiff ([NAME]) and the second plaintiff ([NAME]) are married. They are, respectively, the [NAME] of the first defendant ([NAME]) and the second defendant ([NAME]). The third defendant ([NAME]) is a company controlled by [NAME], and is the trustee of their [NAME].

3. The present dispute concerns five blocks of land (the Land) which formed part of a farming enterprise originally operated by [NAME] in a [NAME] known as the [NAME] ([NAME]) near [NAME]. [NAME] is the [NAME] of three of those blocks: "[NAME]", "[ADDRESS]" and "The Reserve" (the [NAME]). They are subject to a caveat lodged by [NAME] (the [NAME]). [NAME] is the [NAME] of the other two blocks: "[NAME]" and "[NAME]". They are also subject to a caveat lodged by [NAME] (the [NAME]). The Caveats are in almost identical terms. 4. [NAME] claim that the [NAME] hold the Land on constructive trust for them. The primary, but not exclusive, basis for that claim is a Deed of Family Arrangement, and the [NAME] made in it, between the four natural parties made on 13 June 2019 (the DOFA). As part of the purported implementation of the DOFA, [NAME] were later admitted into [NAME]. Putting it neutrally for present purposes, the DOFA contemplates that by 1 July 2026 [NAME] will have retired and [NAME] will have become owners of the Land and related farming enterprise as the only partners in [NAME].

5. Relations between the parties have broken down. [NAME] transferred [NAME] to [NAME] as trustee of [NAME]'s [NAME]. The parties agree that [NAME] is at an end, but differ as to the legal basis for that result. 6. [NAME] and [NAME] have respectively entered into contracts for sale of the Land for a combined price of just over $10.1 million. Those contracts are due to complete on 2 February 2023. [NAME] and [NAME] have issued lapsing notices in respect of the Caveats.

7. These proceedings were commenced by Statement of Claim filed on 6 October 2022. [NAME] seek the extension of the Caveats by notice of motion filed on 7 November 2022 (the Motion) and which I heard in the Duty List on the last Wednesday of term. As a result of matters which arose during the course of argument, I granted leave to the parties to file and serve additional affidavits and submissions on some limited issues over the following two days, all of which I have also taken into account. That included evidence, which the Court accepts, that caveats by a third party over some of the Land relate to cropping rights which are expected to be lapsed by consent because the crops have been harvested.

8. For the reasons which follow, the [NAME] will be extended. While the [NAME] will not be extended, leave will be granted to [NAME] to file a fresh caveat over the blocks held by [NAME] asserting a [NAME] v [NAME] claim against that company in relation to those blocks. 9. [NAME] of Counsel appeared for [NAME]. [NAME] of Senior Counsel appeared with [NAME] of Counsel for the [NAME].

The evidence on the Motion 1. [NAME] relied on three affidavits from their solicitor, [NAME], which attached relevant documents and correspondence. [NAME] criticised [NAME]' case for want of direct evidence from [NAME]. In response, [NAME] also relied on the allegations made in the statement of claim, which had been verified by [NAME]. To the extent [NAME] had to prove any matters for the purposes of their application, the Court finds they were sufficiently proven through [NAME]' affidavits (including annexures) and the verified statement of claim.

2. The [NAME] relied on an affidavit affirmed by [NAME] and an affidavit sworn by their solicitor, [NAME]. I have also had regard to the [NAME]' defence, which has been verified by [NAME].

3. No deponent was required for cross-examination.

The Facts 1. As might be expected in a case of this kind, it is clear from the material before the Court that the parties have different recollections of the various relevant conversations between them. Those differences are not something the Court can or should attempt to resolve on this application. I have determined this application by reference to the essential facts which appear from the objective and otherwise uncontroversial evidence, in particular the DOFA. It was by reference to that material that the parties advanced their respective cases.

2. On 1 July 2007, [NAME] entered into a formal written [NAME] agreement to operate a farming enterprise as members of [NAME] under the name "[NAME]".

3. The blocks the subject of the [NAME] are [NAME], [ADDRESS] and Reserve. [NAME] had purchased [NAME] in 1978. Reserve was purchased in 2011.

4. The properties the subject of the [NAME] are [NAME]. These were bequeathed to [NAME] by a neighbour who died in 2017.

5. In 2013, [NAME] were living in Townsville. In factual circumstances which are disputed between the parties as to what may have induced them to do so, they moved from Townsville and, in 2014, [NAME] commenced working for [NAME] as an employee.

6. On 6 and 7 October 2015, with the assistance of "[NAME]", a firm describing itself as "Succession Planning Specialists", a family meeting took place attended by the members of the [NAME] family together with [NAME] and the husband of [NAME] and [NAME]'s other daughter, [NAME]. This led to what was described as a "family in-principle agreement" of 22 points which included a plan to enable [NAME] to live independently in [NAME] in their retirement in approximately 10 years (2025), by which time the farming blocks were to have been transferred to [NAME] to be farmed by her and [NAME]. The transfer to [NAME] alone was recorded as being at [NAME]'s suggestion. The "agreement" was silent on what (if any) consideration would be paid by [NAME] for the blocks.

7. On 10 November 2018, [NAME] wrote a letter to her parents which included: "At the moment we feel very hamstrung. [NAME] does is work … We have no time to go away or socialise or holiday … That would be fine if we knew what we were working towards but we don't because you haven't decided. It just seems you put it in the too hard basket and just want to keep stringing us along longer and longer."

1. On 18 December 2018, [NAME] attended a meeting with Ms [NAME], an accountant. The notes of that meeting (the Notes), headed "Notes – Succession Planning Meeting 18 December 2018", describe its purpose as being "to develop a succession plan for the future and to provide clarity". The Notes record a proposed plan which involved [NAME]'s entire interest in [NAME] being transferred in tranches between 2018 to 2026 to [NAME], commencing with them having a 25% interest by 1 July 2019.

2. On 13 June 2019, [NAME] entered into the DOFA which had been prepared by a firm of solicitors in [NAME]. The DOFA comprises three recitals and three operative clauses. Attached to the DOFA were the Notes. The DOFA provided (emphases added): "DEED OF FAMILY ARRANGEMENT THIS DEED made the 13 [sic] day of June 2019 … WHEREAS A. [NAME] are partners in a [NAME] trading as "[NAME]" ([NAME]") and includes livestock, plant and equipment which operates in the Quandialla District. B. [NAME] have now transferred their interest in property known as "[NAME]", Quandialla (being Folio Identifier XXX/XXXXXX and XXX/XXXXXX) to [NAME] by way of an initial farm succession plan. C. All parties have consulted with their Accountant, [NAME] of [NAME] in relation to formulating a succession plan acceptable to all parties that will ensure that [NAME] are able to have a secure retirement that will also provide some long term financial provision for their daughters, [NAME] and also enable [NAME] to progressively acquire various lands owned by [NAME] on fair terms to all concerned. NOW THE PARTIES AGREE 1. That they will adopt as a guideline those meeting notes that were formulated at a meeting held on 18 December 2018, a copy of which is attached and marked 'A'.

2. In so doing all parties acknowledge that circumstances may change beyond the control of each of them whereby despite the best intentions of the parties the agenda previously agreed to marked 'A' cannot be complied with however all parties agree to make ever [sic] endeavour to comply with that agenda in the future.

3. That the terms of this agreement shall be binding as far as possible upon the heirs, executors and assigns of all the parties hereto. … "A" Notes – Succession Planning Meeting 18 December 2018 In attendance: [NAME]: To develop a succession plan for the future and to provide clarity Success What will a successful succession plan look like? - continued conversations and consultation with [NAME] - continued input and support from [NAME] – respect knowledge - slow down [NAME] come and go prior to full retirement - farm as a going concern - secure retirement [NAME] - some long term financial provision for [NAME] - [NAME] free to attend school events for the grand children - everyone to "have enough" to live comfortably - be able to support 2 families - fair outcome – outcome itself may change over time - fair is not necessarily equal - [NAME] wills need to be updated regularly - plan will provide clarity, security, direction, deadlines and timeframes - right place at the right time - [NAME] want to feel like they have worked for and not been given the farm - relationships intact - [NAME] debt free house in town … Structure One operating entity or separate operating entities? Pros and Cons of separate operating entities Cons separate identity loss of scale conflicting priorities Pros separate decision making separate control Decision: continue existing [NAME] – clause 19 of existing [NAME] agreement has continuity clause [NAME] % [NAME] 1.7.2018 100% 0% 1.7.2019 75% 25% 1.7.2021 50% 50% 1.7.2024 25% 75% 1.7.2026 0% 100%

[NAME] % [Not reproduced – A detailed timeline for each relevant block, its value and debt burden, and the timing for transfer to [NAME]] … Expenses Agreed expenses to be paid by [NAME] until 1.7.2026 - Income tax of partners - Telephone - Electricity - Motor Vehicle, including a ute and family vehicle, eg Prado - Replacement of Motor Vehicles as required - Overseas Farm tours (until 1.7.2024) - [NAME] wedding - Non-farm related holidays not included Drawings Agreed drawings from [NAME] until 1.7.2026 - General drawings ([NAME]) $2,000 pw - General drawings ([NAME]) $1,500 pw - Superannuation ([NAME]) $50,000 pa If general drawings increase between now and 1.7.2026, they increase in proportion to current agreed drawings. …"

1. The DOFA (including its annexure) was silent on what the "fair terms" were on which [NAME] would acquire the Land, including for what consideration, if any, over and above the income generated by the operation of [NAME].

2. Purportedly in accordance with the DOFA, by a [NAME] deed made on 1 July 2019 between [NAME] were formally admitted as members of [NAME], with their interests being: * [NAME]: 37.5% * [NAME]: 37.5% * [NAME]: 12.5% * [NAME]: 12.5% 1. Clause 10 of that [NAME] deed provided: "10. That [NAME] may otherwise be determined by any partner giving to the others not less than six months' notice in writing expiring at any time unless such notice is waived by the mutual consent of the partners expressed in writing and signed by them."

1. Despite having admitted [NAME] to [NAME]'s affidavit evidence was that "From 1 July 2019, and then throughout the 2020 and 2021 years, my working relationship with [NAME] was poor. I found him to be rude and disrespectful to me and [NAME]". That description is contested.

2. On 26 November 2019, [NAME] transferred [NAME] to [NAME] in its capacity as trustee of [NAME]'s [NAME]. [NAME] leased those blocks back to [NAME] as joint tenants. [NAME] do not appear to have objected to these transfers at the time, the timeline set out in Annexure "A" to the DOFA did refer to "[NAME]" being part of [NAME] assets as at 1 July 2026 and one-third of [NAME] being part of [NAME] assets, with the time for the transfer of that one-third interest "tbc", which I have assumed means "to be confirmed". On [NAME]'s evidence, he had told [NAME] at the meeting on 18 December 2018 (see paragraph [20] above) that he intended to transfer [NAME], together with another block, into their ([NAME]'s) [NAME].

3. In 2019 and 2021 two other blocks were transferred (one only in part) to [NAME], purportedly pursuant to the DOFA.

4. In July 2021, [NAME] moved to [NAME].

5. On 3 May 2022, [NAME]' solicitor wrote to the [NAME]' solicitor, including: "Further, I am instructed that my [NAME] wish to put [NAME] on notice that they wish to dissolve [NAME]. Please confirm that [NAME] agree to waive the six month period required pursuant to clause 10 of [NAME] Agreement dated 1 July 2019 and that they agree to do all things necessary to dissolve [NAME] as at 30 June 2022."

1. On 10 May 2022, the [NAME]' solicitor responded, including: "[NAME] wish to dissolve [NAME] as soon as possible and, preferably, by 30 June 2022, however, as stated in [NAME]' documents (when they refer to the retention of $150,000 until 31 December 2022) that may simply not be possible despite best efforts and also may not maximise the return to the parties. Please confirm if your client's preference is an unreserved fire sale of everything in order to achieve that outcome and I'll obtain instructions."

1. On 17 June 2022, [NAME]' solicitor wrote to the [NAME]' solicitor, including: "3. My [NAME] rely on [NAME]' breach of [NAME] agreement to terminate [NAME] pursuant to clause 9 of [NAME] agreement dated 1 July 2019; and 4. My [NAME] wish to appoint an administrator to wind up [NAME] and if [NAME] do not agree to do so by close of business son 27 June 2022 then my [NAME] will apply to the court to do so pursuant to section 39 of [NAME] Act 1892 and shall rely on this letter in relation to any issue as to costs."

1. On 8 July 2022, [NAME]' solicitors wrote to the [NAME]' solicitors, including: "In our view, [NAME] breached [NAME] agreement and therefore [NAME] lawfully dissolve [NAME] in accordance with clause 9 of [NAME] Agreement by the notice given in [NAME]'s email dated 23 May 2022. [NAME] dispute that [NAME] have grounds to dissolve [NAME] based on this clause 9. Notwithstanding the above dispute, it is clear from a perusal of the correspondence exchanged to date that the parties wish for [NAME] to be dissolved. We note that clause 10 of [NAME] Agreement gives the parties a mechanism to dissolve [NAME] by mutual consent. In these circumstances, we are instructed to request that [NAME] consent to the dissolution of [NAME] by giving notice in writing. A Dissolution Notice for [NAME]' signature is annexed."

1. It does not appear that the Dissolution Notice was ever signed.

2. On 29 July 2022, a clearance sale occurred at [NAME] which raised approximately $2 million that was paid into [NAME] account.

3. On 14 September 2022, the Caveats were [NAME]. They are in almost identical terms, with the only difference being in the last bullet point of each attachment: "ESTATE OR INTEREST CLAIMED Estate In Fee Simple By virtue of: Beneficial Interest In Trust Details Supporting The Claim: See Attachment ATTACHMENT See attached Claim Details … · [NAME] and [NAME] ([NAME]) claim an equitable interest in the land in the nature of a constructive trust, arising from a common intention that the [NAME] have an interest in the land owned by the [NAME], and the [NAME] acted to their detriment on the basis of that common intention. · On or around 2013, the [NAME] were living in Townsville, Queensland, and were desirous to commence a farming operation, having both grown up on farms and wanting their children to also grow up on farms. · [NAME]'s parents, [NAME] represented to the [NAME] that they wanted to pass on their family operation including their land and that if the [NAME] worked in conjunction with [NAME] would transfer certain property to the [NAME]. · In around 2013, [NAME] represented to the [NAME] that they wanted to pass on their family operation including their land and that if the [NAME] worked in conjunction with [NAME] would transfer certain property to the [NAME]. · [NAME] were made by [NAME] in the ensuing years to a similar effect. · In reliance on these [NAME], the [NAME] relocated from Townsville and commenced farming in conjunction with [NAME]. · Overtime [sic] [NAME] completed increasing amounts of work in relation to the farming enterprise such that by 2019 [NAME] was completing 80-90% of the physical work and [NAME] was completing the bookwork. · The arrangements made orally culminated in a Deed of Family Arrangement which was executed by [NAME] on 13 June 2019 (Deed). · The Deed provided that by 2026 [NAME] would own 100% of [NAME], including all plant, equipment and livestock, and that [NAME] would transfer certain properties in their name to [NAME]. · After the Deed was signed, a [NAME] agreement was also executed by [NAME] on 1 July 2019 which acknowledged that [NAME] had previously been agreed to verbally and acknowledged that [NAME] were 25% shareholders in [NAME]. · Pursuant to the Deed, in 2019, [NAME] transferred Part "[NAME]" to the [NAME] and in 2021 [NAME] transferred "[NAME]" to the [NAME]. [Final bullet point in the [NAME]] · The [NAME] assert an equitable interest in the properties which were the subject of the Deed but are yet to be transferred, namely Lots XXX and XXX in DP XXXXXX and Lots XX and XX in DP XXXXXX." [Final bullet point in the [NAME]] · The [NAME] assert an equitable interest in the properties which were the subject of the Deed but are yet to be transferred, namely Lots XXX and XXX in DP XXXXXX and Lots XX and XX in DP XXXXXX, which are owned by [COMPANY], a company owned by [NAME]."

1. On 15 September 2022, [NAME]' solicitors wrote to the [NAME]' solicitors, including: "… 2. We also note that [NAME] have placed the "[NAME] aggregation" for sale. [NAME] have an equitable interest in some of that land and as such have [NAME] caveats over the properties known as [NAME], [ADDRESS], Reserve, [NAME], and [NAME] ([COMPANY]).

3. The basic facts giving rise to the equitable interest are set out in the caveat application which is attached. In circumstances where [NAME] executed a deed on 13 June 2019 which confirmed such an interest, we do not understand the basis for [NAME] to assert that it holds the [COMPANY] free of any beneficial interests. We have assumed this is [NAME]' position given the existence of the sales campaign. Please correct this assumption if it is incorrect.

4. For the avoidance of doubt, we are concerned by and reject the implication in recent correspondence (since your firm commenced acting) that [NAME] have an interest in [NAME]' properties, for example [NAME]. 5. [NAME] intend to commence proceedings in order to have their interests in the [COMPANY] protected and recognised. Can you please advise if you hold instructions to accept service? 6. Please confirm whether [NAME] would be willing to undertake to not deal with or dispose of [COMPANY] until there is a resolution (either judicial or negotiated) to the issues concerning my [NAME]' interest in the [COMPANY]. …"

1. On 16 September 2022, the [NAME]' solicitors replied, including: "… 4. Please ensure any such proceedings are commenced as a matter of urgency as, but for your instructions to commence proceedings for [NAME], ours would instruct us to lodge Lapsing Notices in response to the caveats for each '[COMPANY]' (as those that term is defined in your letter).

5. Your seeking of [NAME] to undertake not to deal with the [COMPANY] is also, respectfully, misconceived. As your letter acknowledges in its opening, [NAME] have placed the [COMPANY] for sale. In fact, they have actually secured purchasers for a combined $13,874,000. If [NAME] are to be asked to compromise those sales by agreeing to not deal with or dispose of the properties in light of [NAME]' caveats, the normal course would be for [NAME] to firstly provide an undertaking as to damages. These may include, in addition to the obvious risk of the inability to procure comparable sale prices through a second marketing round, agent and marketing expenses also.

6. So we may take instructions from [NAME], please confirm as a matter of urgency as to whether [NAME] are willing to provide such an undertaking, and how [NAME] would propose to meet the undertaking, should it be necessary to call upon. It is premature to expect [NAME] to expose themselves to what will be significant losses, by allowing the sale of the [COMPANY] to fall through, without the usual undertaking being provided.

7. It is otherwise also difficult to understand how [NAME] say that the Deed of Family Arrangements dated 13 June 2019 affords [NAME] any equitable interests in the [COMPANY]. At best, the Deed aspires to provide [NAME] the opportunity to "progressively acquire various lands owned by [NAME] on fair terms to all concerned", though the fair terms are not quantified in any way, and to date no consideration has been provided by [NAME] to substantiate any "fair terms" which could compel [NAME] to transfer either [COMPANY] to [NAME]. Indeed, given the breakdown in the relationship between our respective [NAME], it is inherently difficult to see how [NAME] could, under the Deed or otherwise, work with [NAME] moving forward in a way which might enliven some rights of your client to the properties.

8. In this circumstance, [NAME] do not agree that [NAME] have any rights to have lodged the Caveats. Given the urgency of the Caveats possibly compromising the sale of the [COMPANY], please serve on us any court documents as a matter of urgency. …"

1. On 30 September 2022, the [NAME]' solicitors wrote to [NAME]' solicitors, including: "… 2. We have not had a response to our request that you confirm, as a matter of urgency, whether [NAME] are willing to provide [NAME] with an undertaking as to damages. As explained in our letter, such an undertaking would be the normal course if [NAME] are to be asked to compromise of the sale of the [COMPANY] when they have already secured purchasers.

3. We are now instructed that exchange of Contracts for Sale are intended to occur next week, though we have been waiting to be served with your foreshadowed proceedings prior to advising [NAME] on their position. As [NAME] stand to lose considerably if the prospective sales are lost, and as was stated in our letter, we are instructed to give notice that we are instructed to lodge Lapsing Notices in response to the caveats for the [COMPANY] next week, so as to not deter the prospective purchasers.

4. That said, before we lodge the abovementioned Lapsing Notices to prevent the sale of the [COMPANY] from falling through, we ask that you urgently confirm instructions on whether [NAME] are willing to provide the abovementioned undertaking.

5. We look forward to your urgent reply by close of business Tuesday 4 October 2022 after which we will lodge the Lapsing Notices without further notice to you."

1. On 4 October 2022, [NAME]' solicitors replied, including: "… 2. [NAME] are aware that the Court may require them to give the usual undertaking as to damages. We are instructed that [NAME] would be willing to give that undertaking. …"

1. On 5 October 2022, the [NAME]' solicitors replied, including: "… Undertaking as to Damages 3. By our letter dated 16 September 2022, we sought urgent confirmation from your client as to whether they are willing to provide an undertaking.

4. Nothing has been said to explain whether [NAME] have the ability to meet such an undertaking.

5. Meanwhile, [NAME] have potential purchasers for the properties wanting to exchange Contracts for Sale with [NAME], at the combined purchase price of $13,874,000. [NAME] cannot reasonably be expected to wait any longer for [NAME] to provide some explanation of what claim, specifically, they intend to bring, or why such a claim should preclude [NAME] from selling their properties.

6. That being said, to the extent your client's Caveats identify the Deed of Family Arrangement, you will appreciate that that Deed only affords [NAME], at best, the opportunity to "acquire various lands owned by [NAME] on fair terms to all concerned".

7. Here, the properties which [NAME] are attempting to prevent [NAME] from selling have the opportunity to be sold for $13,874,000. To the extent the Deed may be capable of being enforced by [NAME] (which is denied), it does not equate to any properties being gifted to [NAME], and fairness does not require [NAME] to provide [NAME] with a discount.

8. We are instructed that [NAME] have never made an offer to acquire the properties now being sought to be sold by [NAME], though if [NAME] are interested in purchasing them for the same sale price as has been offered by the other prospective purchasers, please let us know as a matter of urgency. [NAME] otherwise have instructed us that they intend to proceed with an exchange of Contracts for Sale of Land for the properties, and apply for a lapsing of the caveats. Given the potential ramifications if the sale to the potential purchasers is lost, please let us have your reply by 10.00am on Thursday 6 October 2022. …"

1. By a statement of claim filed on 6 October 2022, [NAME] commenced these proceedings. The statement of claim is divided into two parts. The first is described as "relief relating to an interest in the land" and the second as "relief relating to [NAME]".

2. Identical relief is sought in relation to each block of land, so it only necessary to set out one paragraph by way of example: "Relief relating to an Interest in the land 1. In relation to the property known as "[ADDRESS]" on XXX XXX, Quandialla NSW [POSTCODE] being the land comprised in folio identifier Lot XXX in Deposit Plan XXXXXX. (a) a declaration that it was an implied term of the deed executed 13 June 2019 (Deed of Family Arrangement) that the [NAME] would not dispose of their interest in [ADDRESS] to anyone other than [NAME]; (b) further or in the alternative, a declaration that the [NAME] hold [ADDRESS] on constructive trust for [NAME]; (c) the [NAME] do all things necessary to transfer all rights title and interest in [ADDRESS] to [NAME] (d) in the alternative to (b) above, equitable compensation."

1. On 7 October 2022, [NAME]' solicitors wrote to the [NAME]' solicitors, including: "… 2. We reiterate that the contents of the statement of Claim ought to provide [NAME] with sufficient information regarding the basis of [NAME]' claim to an interest in the [COMPANY] and a 50% share of the [NAME]. Further particulars can be provided in the usual way upon request.

3. Now that [NAME] have the Statement of Claim, our view is that there is no basis to file the lapsing notices as [NAME] 'claim [sic] discloses a caveatable interest which has or may have some substance. Any lapsing notice issued by [NAME] will put [NAME] to the unnecessary expense of seeking an extension of the caveat.

4. In relation to the usual undertakings as to damages, [NAME] will give the undertaking if required by the Court. …"

1. On 10 October 2022, the [NAME]' solicitors wrote to [NAME]' solicitors, including: "… 3. Moreover, we have now twice asked [NAME] to confirm that they are willing to provide an undertaking as to damages, and explain how that undertaking may be made good. Whilst your responses have indicated some willingness by [NAME], they are silent on how (if at all) [NAME] may meet the obligations of what will be a significant undertaking. [NAME]' apparent willingness to provide the undertaking is also not entirely clear, as it has [sic] qualified by the condition "if required by the Court".

4. In that circumstance, the balance of convenience in the caveats being extended, or lapsing, plainly favours the latter. The prejudice to [NAME] is not hypothetical. They have a purchaser for the [NAME] and [NAME]/[ADDRESS] properties ([COMPANY]), though exchange of contracts has been delayed due to [NAME]' caveats. The combined purchase price under Contracts for Sale, which have already been prepared by [NAME]' conveyancers, totals $10,183,135. We apologise for any confusion which arises from our 5 October 2022 letter mistakenly referencing a contract value of $13,874,000, though a copy of the Contracts for Sale for the [COMPANY]. The interest alone which [NAME] will miss out on will accrue at an alarming rate of over $40,000 per month (using a simple 5% rate for the purpose of this letter)….

10. In any case, even with [NAME] showing some willingness to provide an undertaking, the balance of convenience in the [COMPANY] remaining subject to the caveats plainly favours [NAME]. This is particularly the case where, if [NAME]' interest in the [COMPANY] is consistent with the "gift" given by [NAME] for the [NAME] property (which is denied), then the value of [NAME]' interest, would be less than $1,400,000. Preventing a $10,183,135 sale in that situation is, respectfully, unrealistic.

11. This being said, [NAME] intend on defending the proceedings which [NAME] have brought. Whilst they anticipate being fully successful in their defence, we are instructed they will consent to orders being entered by the Court requiring them to pay $5,000,000 from the sale proceeds of the [COMPANY] into our firm's trust account, with a view of being invested in an interest bearing account that neither party will be able to withdraw, pending further orders of the Court. …"

1. On 20 October 2022, lapsing notices were served in relation to each of the Caveats.

2. On 24 October 2022, [NAME] entered into a contract to sell [NAME], [ADDRESS] and Reserve, and [NAME] entered into a contract to sell [NAME]. Both contracts provide for settlement to occur on 2 February 2023. The combined price payable under the two contracts is slightly more than $10.1 million.

3. On 28 October 2022, [NAME]' solicitors wrote the [NAME]' solicitors, including: "… 6.3 The primary relief sought by [NAME] is the transfer of all rights[,] title and interest in the [COMPANY]. [NAME] have also sought equitable compensation; however, this is not the primary remedy. The primary remedy relates to an interest in the land. The primary remedy is consistent with the expressed intention of [NAME] that the land stay within the family. The position of [NAME] is that they have an interest in the land and are entitled to a remedy consistent with their interest. The court retains a discretion to fashion relief. [NAME]' case is that the discretion should be exercised to recognise the interest in land. This is so for the following reasons: a. Farming land in the Quandialla region is tightly held. If the [COMPANY] are sold to a third party, it is unlikely that [NAME] will have an opportunity to acquire these properties again in the future. b. [NAME] relied on the conduct of [NAME] to move from Queensland to Quandialla. In doing so they abandoned their lifestyle and successful careers in Queensland on the understanding that [NAME] would act consistently with their actions and words. They [sic] best part of the last decade of their lives has been spent attempting to establish a viable farming operation in the very distinct location of Quandialla, which is the only place their children have ever called home. Without their interest in the [COMPANY] being recognised it is difficult to see how their farming business can continue in the manner planned. c. [NAME] has a historical, familial, and emotional attachment to the land. We also understand that it was the intention of [NAME] to keep the property in the hands of the family. [NAME] had the expectation their children would have a future on this land. d. The [COMPANY] are close to [NAME]' home at "[NAME]" and share a border with their land situated at "[NAME]". Due to their proximity, the [COMPANY] have been designed and improved to maximise efficiencies. For example, "[ADDRESS]", "[NAME]", "Reserve" and "[NAME]" all share a water connection, power, and silos situated on [ADDRESS]. e. If [NAME] had to purchase other farming land, it could be 10 or more kilometres away. There is additional expense and difficulties associated with the logistics of managing farms located at such a distance.

7. The alleged prejudice [NAME] suffer should the caveats be extended is overstated. [NAME] have a duty to minimise damages. If the sales do not proceed, it would be unreasonable for [NAME] not to take steps to put the [COMPANY] to productive use, either by cultivating the land or leasing it to a third party. It is too simplistic to calculate the potential loss on an undertaking by the interest which could be earned on sale proceeds. This does not take into account the significant amount of income which could otherwise be derived from farming or leasing the [COMPANY].

8. In our view, given the circumstances outlined above, a court would be prepared to accept security in the form of a charge against "[NAME]" and "[NAME]" in favour of [NAME] up to the amount of $250,000.00 to secure any liability they are found to have pursuant to the Undertaking, on terms that [NAME] are not permitted to take any step to enforce the Charge without leave of the Court. We are instructed that [NAME] are prepared to procure such a charge. …"

1. On 2 November 2022, the [NAME]' solicitors wrote to [NAME]' solicitors, including: "… 7. [NAME]' proposal of providing a charge over the "[NAME]" and "[NAME]" properties, as security for [NAME] extending the caveats, is also not sufficient or practical. [NAME]' earlier offers of an undertaking were qualified with conditions such as "if required by the Court". [NAME] reasonably were not required to forego the purchase offers they had on the table for the [NAME] and [NAME]/[ADDRESS] properties, and on that basis the Contracts for Sale for those properties have now been exchanged. It also would go against the express intention of [NAME]' downsizing and relocating to [NAME], if they are required to do so whilst remaining in charge of considerable farming land elsewhere. This is consistent also with the point made in paragraph 6.3(e) of your letter, in which you note that there are logistical expenses and difficulties with managing land more than 10 kilometers [sic] away.

8. Separately, your instructions as to farming land in Quandialla being tightly held, and proximate blocks being of value to maximize farming efficiencies is also agreed by our client. That though, they say, is why it was reasonable for them to secure a purchaser of the blocks able to purchase them in their totality. Were [NAME] to let the offer of $10,183,135 fall from the table, it is respectfully overly simplistic to say that [NAME] ought to have sufficient security by an undertaking as to damages secured by the "[NAME]" and "[NAME]" properties that are valued at less than the sale price otherwise obtained by [NAME]. Moreover, by paragraph 8 of your 28 October 2022 letter, [NAME] only offer to provide a charge over their land up to a maximum of $250,000. Not only will that leave [NAME] without the sale proceeds from their land for however long [NAME]' proceedings may run, but [NAME] will remain liable for all costs and expenses in maintaining the land in the meantime. Those costs and expenses very well could exhaust the charge offered by [NAME] in and of itself. …"

1. Some of the points made in the letter extracted in the preceding paragraph were explained in [NAME]'s affidavit: "19. At the time the Sales Contracts were entered into, [NAME] and I were aware that [NAME] had commenced these proceedings. However, we were (and are) concerned that if the [COMPANY] are not sold, then the loss of the prospective sales will be considerable – the combined sales price being $10,184,135. We are also elderly – I am aged 67 years, and [NAME] is 59 years – and no longer live near the [COMPANY]. If the [COMPANY] are not sold, with [NAME] having broken down between the parties, [NAME] and I are not in a position to maintain the land, and are concerned with the financial responsibility for the properties falling onto us. We also no longer reside on [NAME], and have retired to [NAME] – having moved there in mid-July 2021.

1. On 3 November 2022, [NAME]' solicitors replied, including: "… 5. We say it is remarkable for [NAME] to enter into binding contracts for the transfer of the lands with the knowledge of the caveats. We also note that [NAME] have always indicated a willingness to provide an undertaking and, in our most recent correspondence dated 28 October 2022, offered to provide a secured undertaking. As you know, if an undertaking is proffered the assumption is that it is valuable.

6. In relation to paragraph 8, it is unreasonable for [NAME] to insist upon an undertaking valued at nothing less than the sale price obtained by [NAME] ($10,183,135). The damage to [NAME] is not the sale price. It is the difference between any diminution of the sale price between the current time and the determination of the proceedings. [NAME]' [sic] may suffer no damages if the value of the land increases between now and the substantive trial of the claim.

7. You have previously noted that the estimated amount for foregone interest, assuming 5% per annum, is approximately $40,000 per month, or $480,000 per year. This interest rate is seemingly high, noting that the best rate advertised by the "Big 4" Australian financial institutions for a 12-month term deposit is currently 3.35% at the [NAME]. Further, as we have previously noted, [NAME] can mitigate their damages by putting the land to productive use. If they do not have the capacity to farm the land themselves, it can be leased to a third party.

8. The size of [NAME]' landholding is 2,603 acres: [ADDRESS] – 630 acres; Reserve – 200 acres; [NAME] – 818 acres; [NAME] – 259 acres; [NAME] – 696 acres. Based on current market rates achieved at the nearby property "Quambatook" (approx. 3000 acres directly to the west of [NAME]), [NAME] could lease their land at $100 per acre per annum, equating to an amount of $260,300.00 per year.

9. On the above analysis, foregone interest of $480,000 per year is offset by lease income of $260,300, giving an estimate of damages of $219,700 per annum. Assuming, generously to your client, that the proceedings take 24 months to be determined, the exposure of your client which is reasonably in contemplation is $439,400. 10. [NAME]' previous offer of a secured undertaking was for $250,000 which would have addressed exposure for 12 months of litigation. In the interest of resolving [NAME]' concerns [NAME] offer to increase the amount of the secured undertaking to $500,000 which we note is in excess of the estimated $439,400. …"

1. On 7 November 2022, the [NAME] filed the Motion seeking the extension of the operation of the Caveats.

2. On 8 November 2022, consent directions were made by the Court for the filing of a defence and for evidence in support of the Motion. The Caveats were extended until 13 December 2022. At the conclusion of the hearing before me, the parties agreed that the Court should extend the Caveats until further order pending delivery of these reasons. That order was made.

The Statement of Claim 1. Insofar as the Land is concerned, I have set out an example of the relief sought in paragraph [42] above.

2. The Statement of Claim pleads [NAME] said to have been made by [NAME] commencing in 2013. However, because the parties' course of conduct appears to have culminated in the DOFA, it is sufficient for present purposes to set out those parts of the Statement of Claim most immediately relevant to the DOFA: "B. 7 The December 2018 [NAME]

29. At the December 2018 Meeting, [NAME]: (a) acknowledged that [NAME] had been working for a long time on the farms for a minimal wage on the understanding that [NAME] would be transferred the land and the business; (b) acknowledged that they would execute a legally binding document to give effect to the agreement struck at the December 2018 Meeting; (c) agreed and represented that: (i) they would cause the transfer of [NAME] to [NAME] on 1 July 2019 ([NAME]); (ii) they would cause the transfer of [NAME] to [NAME] on 1July 2021; (iii) they would cause the transfer of [ADDRESS] to [NAME] on1 July 2024; (iv) they would cause the transfer of Reserve, [NAME] and [1/3] of [NAME] to [NAME] on 1 July 2026; (v) formalise a [NAME] arrangement which provided for [NAME] to have a: (A) 12.5% each (25% in total) [NAME] share on 1 July 2019 (B) 25% each (50% in total) [NAME] share on 1 July 2021 (C) 37.5% each (75% in total) [NAME] share on 1 July 2024 (D) 50% each (100% in total) [NAME] share on 1 July 2026 (vi) [NAME] would not inherit under their wills. (vii) that their other daughters, [NAME], would inherit the estate assets under their wills, with such estate assets being the property known as "[NAME]", "[NAME]" (2/3), a [NAME] house and superannuation. (c. i to vii together December 2018 [NAME]) (viii) in consideration of the above, [NAME] would: (A) pay to [NAME] $350,000; (B) forgo their rights under the 2013 [NAME] Agreement; (C) forgo their rights under the First and [NAME]. (d) undertook to have their solicitor, [NAME] of [NAME] of [NAME] to draft: (i) a formal [NAME] agreement; (ii) a formal deed of family arrangement which documented the agreement made at the December 2018 meeting. Particulars i) Notes Succession Planning Meeting 18 December 2018 30. At some time between 18 December 2018 and 13 June 2019, [NAME]: (a) instructed [NAME] of [NAME] of [NAME] to draft a formal [NAME] agreement; (b) provided the notes from the December 2018 Meeting to [NAME] of [NAME] of [NAME] and instructed him to draft a deed of family arrangement which: (i) documented the agreement made at the December 2018 meeting; (ii) annexed the minutes of the December 2018 to the deed of family arrangement. (c) sought and obtained legal advice on both of the above documents;

31. On or around 13 June 2019: (a) [NAME] again agreed and represented the matters set out at paragraph 29 upon placing their signatures on the document entitled Deed of Family Arrangement (DOFA); (June 2019 [NAME]) Particulars i) The DOFA was signed sealed and delivered. ii) [NAME] initialled every page 32. On 1 July 2019, [NAME] executed the document entitled [NAME] Agreement.

33. In the circumstances: (a) the parties expressed a solemn intention to be bound the terms of the DOFA; (b) it was an implied term of the DOFA that [NAME] would not cause the transfer of the Properties to anyone other than [NAME] (DOFA Implied Term); (c) [NAME] are estopped from denying the truth of the propositions set out in the DOFA including the proposition that they would effect the transfer of the Properties to [NAME].

34. Between July 2019 and October 2021: (a) Pursuant to the agreement and [NAME] made at the December 2018 Meeting and in the DOFA: (i) [NAME] transferred the [NAME] to [NAME] on 1 July 2019; (ii) [NAME] sold their Townsville Apartment; (iii) [NAME] $350,000 to [NAME] by instalments of $180,000 on 1 July 2019 and $170,000 on 24 October 2019. (iv) [NAME] transferred [NAME] to [NAME], with the transfer of title occurring on or about 25 November 2021. (v) [NAME] orally represented that [NAME] were, together, 50% owners of [NAME] as at 1 July 2021. Particulars i) The representation was made by [NAME] to [NAME] in about June or July 2021 when standing on the steps of the house at "[NAME]", whereby [NAME] stated to the effect that [NAME] and [NAME] were 50% owners.

35. In October 2021, [NAME] represented that they no longer intended to abide by the agreement and [NAME] made at the December 2018 Meeting and in the DOFA. Particulars i) On or about 29 October 2021, [NAME] had a conversation with [NAME] at [NAME]. ii) [NAME] stated to the effect that he and [NAME] had no intention of keeping with the succession agreement. B.8 [NAME] - summary 36. The conduct of [NAME] and the [NAME] since 2013 did not involve a mere standing by on the part of the [NAME] and demonstrated: (a) That the [NAME] acquiesced and were committed to, the First Equity Representation, the [NAME], the September 2015 Representation, the October 2015 [NAME], October 2018 [NAME] and the December 2018 [NAME] (together the [NAME]) and were working toward the future contemplated by the [NAME]. (b) That the [NAME] unambiguously understood that [NAME] accepted, acquiesced and were committed to the [NAME] and were working toward the future contemplated by the [NAME]. (c) The [NAME] encouraged the expectation of [NAME] that the [NAME] accepted, acquiesced and were committed to working toward the future contemplated by the [NAME]. … B. 9 Reliance 38. On the facts and circumstances here pleaded, including the [NAME] formed a common intention as to: (a) their joint endeavour to farm the Properties; (b) their present or future ownership of the beneficial interest in the Properties. 39. [NAME] have acted to their detriment in reliance on the common intention Particulars … (ii) In reliance on the September 2015 Farm Representation, the October 2015 [NAME], October 2018 [NAME], and the December 2018 [NAME]: A) [NAME] remained on the property; B) [NAME] increased their share of the work in running the farming business compared with [NAME]; C) [NAME] continued to receive a wage from [NAME], which was less than what he could have earned in the banking sector; D) [NAME] refused job offers to return to work in the banking sector; E) [NAME] did not receive any remuneration for the work she performed for [NAME]; F) [NAME] did not pursue contracting opportunities in reliance upon the September 2015 Farm Representation; G) [NAME] offered to move away, but did not in relance upon the October 2018 [NAME]. (iii) In reliance on the December 2018 and June 2019 [NAME]: A) [NAME] sold their Townsville apartment to pay [NAME] the agreed sum of $350,000, notwithstanding that the housing market was depressed and they sold the unit at a loss. B) [NAME] sold their shareholding to pay [NAME] the agreed sum of $350,000. B. 10 Relief Claimed 40. It would be contrary to the [NAME], conduct, encouragement, acquiescence and common intention, unconscionable, and a fraud on [NAME] for the [NAME] to assert that [NAME] have no beneficial interest in [ADDRESS], Reserve, [NAME], and 1/3 of [NAME].

41. The [NAME] are estopped from denying [NAME]' beneficial interest in [ADDRESS], Reserve, [NAME] and 1/3 [NAME] 42. [NAME] are entitled to have their expectations derived from the [NAME], conduct, encouragement, acquiescence and common intention made good. …"

1. The Statement of Claim includes a discrete pleading in relation to [NAME]: "C Claim arising out of the DOCA [sic] and [NAME]'s knowledge C. 1 Breach 43. In relation to the [NAME]: (a) Breached the DOFA Implied Term by placing [ADDRESS], Reserve, [NAME] for sale. (b) Breached the DOFA by failing to cause the transfer of 12.5% share in [NAME] to each of [NAME]. (c) Breached the DOFA by transferring [NAME] to the Third Defendant ([NAME]) as trustee for the [NAME]. Particulars i) On or about 1 November 2019, [NAME] transferred [NAME] to [NAME]. ii) The transfer of [NAME] to [NAME] was done without notice to [NAME] and in breach of [NAME]'s fiduciary duties and/or trustee duties owed to [NAME] and in breach of the DOFA. iii) [NAME] are the controlling minds of [NAME] through shareholdings and officeholdings and are the ultimate beneficiaries under the trusts which [NAME] is the trustee of. iv) [NAME] had constructive knowledge that [NAME] transferred [NAME] in breach of their fiduciary and/or trustee duties and in breach of the DOFA. v) [NAME] assisted [NAME] to effect the transfer of [NAME] by taking all steps necessary to enable the transfer of legal title."

1. The [NAME]' defence is a substantial pleading which not only puts [NAME]' allegations in issue but makes numerous positive averments in addition to denials and non-admissions. [NAME], with respect correctly, accepted that the pleading in relation to [NAME] was a less than textbook example of an attempt to plead a [NAME] v [NAME] claim of knowing assistance in breach of trust or fiduciary duty against [NAME]. He accepted that was the only type of proprietary claim available against [NAME]. The [NAME] appear to have understood it as such, given that the defence specifically pleads to the particulars in paragraph 43 of the statement of claim, an irregular course under the rules of pleading in this Court but necessitated because the particulars are really material facts which should have been pleaded as such.

The Legal Principles 1. There was no dispute about the applicable legal principles. 2. [NAME] relied on what was said by Young J (as his Honour then was) in Australian Security Estates Pty Ltd v Bluecrest Holdings Pty Ltd (1999) 9 BPR 17, 533; [1999] NSWSC 524: "[6] The cases are not completely reconcilable but various threads go through them which allow some general propositions to be noted.

1. Eng Mee Yong v Letchumanan [1980] AC 331 is authority for the proposition that a caveat is analogous to an interim injunction.

2. That analogy, as the cases show, must not be pressed too far: Bethian Pty Ltyd v Green (1977) 3 Fam LR 11, 579; Kingstone Constructions Pty Ltd v Crisfel Pty Ltd (1991) 5 BPR 11,987, 11,991. Although the proposition means that a court needs to consider not only whether there is an arguable case but also whether the balance of convenience favours retention of the caveat, (see eg Vella v Aliperti (1995) 7 BPR 14,657, 14,664) the analogy is not complete.

3. Whilst in the case of an interlocutory injunction the rule is that apart from exceptional cases there is no injunction unless an undertaking as to damages is proffered (Southern Tableland Insurance Brokers Pty Ltd v Schomberg (1986) 11 ACLR 337), the rule with caveats is not quite as definite.

4. Although to a degree one proceeds on analogy with interlocutory injunctions, the decision whether to extend a caveat at all under s74K of the Real Property Act, and if it is extended on what conditions, is a matter for the discretion of the Court and that discretion is not to be trammelled by too strict adherence to the principles applicable in the case of an interlocutory injunction. As has been pointed out on numerous occasions, the statutory words of s74K are that the Court is to consider if it is satisfied that the caveator's claim has or may have substance. Thus the Court can continue the caveat at a very early stage in the proceedings, if it can see that given a little time to collect the evidence, the plaintiff might be able to establish an arguable case that it has an interest in land to protect. [ADDRESS] is not limited to situations where the plaintiff can prove its case at the date the application is made: Jensen v Guigni (1994) 6 BPR 13,667, 13,669.

5. Again it is discretionary as to whether the Court will take an undertaking as to damages. The authorities were collected and discussed in BP Oil New Zealand Ltd v Van Beers Motors Ltd [1992] 1 NZLR 211. Barker J referred to all the recent New Zealand articles on the problem, approved the decision in Holmes v Australasian Holdings Ltd [1988] 2 NZLR 303 and then said at p219 that there was a discretion in every case as to whether the Court would ask for an undertaking as to damages as a condition to extend a caveat. His Honour then said, "One would imagine that, in the vast bulk of cases, including the present, there can be little argument but that the discretion should be exercised in favour of the [NAME].""

1. The [NAME] drew attention to what was said by Williams J in [NAME] (NO 210) PTY LTD v Robert Ristevski [2022] NSWSC 821 ([NAME]): [57]-[65] "57 Section 74F(5) requires the caveat to be in the approved form and to specify, inter alia, the prescribed particulars of the estate or interest to which the caveator claims to be entitled. 58 Clause 7 and Schedule 2 of the Real Property Regulation 2019 (NSW) require a caveat lodged under s 74F to specify particulars of: (1) the nature of the estate or interest in land claimed by the caveator; and (2) the facts on which the claim is founded, including (if appropriate) a statement as to the manner in which the estate or interest claimed is derived from the [NAME] of the estate or interest against which the caveat is to operate. 59 Schedule 2 provides that it is not necessary to specify whether the estate or interest claimed is legal or equitable, the quantum of the estate or interest claimed (subject to certain exceptions that are not presently relevant) or how the estate or interest claimed ranks in priority with other estates and interests in the land. 60 Whether a caveat adequately describes the estate or interest claimed is to be decided from the point of view of a person examining the caveat, noting that this person will not necessarily be the [NAME]: Hanson Construction Materials v Vimwise Civil Engineering [2005] NSWSC 880 at [28]. 61 Section 74K of the Real Property Act relevantly provides: "(1) Where a caveator is served with a notice prepared under section 74I (1) or (2), 74J (1) or 74JA (3), the caveator may prepare, in the manner prescribed by rules of Court, an application to the Supreme Court for an order extending the operation of the caveat. (2) Subject to subsection (3), on the hearing of an application made under subsection (1), the Supreme Court may, if satisfied that the caveator's claim has or may have substance, make an order extending the operation of the caveat concerned for such period as is specified in the order or until the further order of that Court, or may make such other orders as it thinks fit, but, if that Court is not so satisfied, it shall dismiss the application." 62 As Brereton J (as his Honour then was) said in Sutherland v Vale [2008] NSWSC 759 at [10]-[12]: "10. … it is an essential ground of even an interlocutory order extending the operation of a caveat that the Court be satisfied that the caveator's claim in the caveat 'has or may have substance'. If the Court is not so satisfied, s 74K(2) commands the Court to dismiss the application.

11. It is well established that on an application for an order extending the operation of a caveat, a test substantially the same as that for an interlocutory injunction applies. First, the applicant must demonstrate that the caveat has or may have substance, the phrase 'may have substance' encompassing the concept of a seriously arguable case; secondly, the Court will have regard to considerations of the balance of convenience and prejudice; and finally, to other discretionary considerations.

12. The starting point, however, is to consider whether or not this caveat has or may have substance. In order to judge that, it is necessary to turn first to the caveat itself and the claim stated in it. … Real Property Regulation provides, by clause 7, that a caveat must specify the particulars as set out in Schedule 3 in relation to the estate or interest to which a caveator claims to be entitled. A central concept in the Act and the Regulation is that of "the nature of the estate or interest claimed" by the caveator: it is that claim that the Court must be satisfied has or may have substance before making an order. The characterisation and description of the nature of the estate, interest or right claimed by a caveator is more than a mere formal requirement of the provisions of the Act, but goes to the heart and substance of their operation, because without a description of the estate, interest or right claimed, neither the Registrar-General nor a person reading the caveat can know whether a dealing would adversely affect the estate claimed, nor can the Court tell whether the caveator's claim has or may have substance..." 63 Thus, the inquiry is not whether the caveator may have some interest in the relevant land. Rather, the Court must be satisfied that the caveator's claim to the particular estate or interest in the land described in the caveat has or may have substance in the sense that there is a seriously arguable question. 64 Section 74L of the Real Property Act provides: "If in any legal proceedings a question arises as to the validity of a caveat lodged under a provision of this Part, the court shall disregard any failure of the caveator to comply strictly with the requirements of this Part, and of any regulations or conveyancing rules made for the purposes of this Part, with respect to the form of the caveat." 65 However, s 74L does not permit the Court to overlook the fact that the caveat claims a different estate or interest than that asserted on the hearing of the application to extend the caveat, or fails to give sufficient particulars of the estate or interest: see [NAME] v [NAME], supra, at [28]-[38]; [NAME], supra, at [12]; Choi v Kim [2013] NSWSC 1774 at [6]-[11]; Woodsman Pty Ltd v Jozic [2018] NSWSC 1311 at [11]-[17] and the authorities there referred to."

1. I respectfully apply and adopt both of those summaries of principle to the present case.

[NAME]' submissions 1. Before turning to summarise [NAME]' submissions, it should first be noted that, with one exception, [NAME] expressly eschewed any reliance for the purposes of the present application on the DOFA as a source of contractual rights in the Land, including as the source of an implied term that the [NAME] could not deal with the Land so as to defeat [NAME]' rights under the DOFA or as giving rise to a right to specific performance. He made it clear that the extension application was based on the fundamental proposition that there was substance in [NAME]' claim to the remedial institution of the constructive trust based on a common intention with the result that his [NAME] were entitled to a transfer in fee simple of the Land.

2. The one exception was his submission that [NAME]' alleged contractual causes of action which were pleaded in relation to obtaining a conveyance of the Land (as opposed to damages) were relevant as a matter of discretion and (to the extent it was juridically different) on the balance of convenience. This was because those causes of action would be lost to [NAME] if the proposed sales were permitted to proceed.

3. As to the form of the Caveats (including what I refer to below as "the [NAME] issue"), [NAME]' submissions may be summarised as:

1. The description of the "estate or interest claimed" as "Estate in Fee Simple/By Virtue of: Beneficial Interest in Trust/Details Supporting the Claim: See Attachment" is sufficient for the purposes of s 74F of the Act because the reference in s 74K(2) to the Court being satisfied the claim "may have substance" is sufficiently broad to capture the nature of the estate that [NAME] seek to have transferred to them following a final hearing.

2. If that is not correct, then because the relevant drop down box on the [NAME] only offers "estate in fee simple", s 74L of the Act applies.

1. As to a serious question to be tried, [NAME]' submissions may be summarised as: 1. [NAME] have a good, arguable case for a common intention constructive trust which would be given effect by an order transferring the Land to them. Issue has been joined by the defence and there has been no suggestion of summary dismissal or strike out. The pleadings amply demonstrate that there is a serious question to be tried between the parties.

2. The DOFA is clear evidence of the [NAME] which form the foundation of [NAME]' constructive trust claim. Any argument about the meaning and effect of those parts of the DOFA which have been emphasised in the extract in paragraph [21] above is a matter for trial and demonstrates a serious question to be tried. This includes [NAME]' contention that the transfer of the Land was intended to occur against the background of the continued operation of [NAME], as opposed to the Land being the subject of a sale with some additional consideration to be provided by [NAME].

3. In relation to the IJAMOTT Caveat, the last bullet point (see paragraph [21] above) of the attachment is sufficient to raise the substance of the [NAME] v [NAME] claim manifested at paragraph 43 of the statement of claim. Insofar as it was suggested that there should have been a restriction to one-third of [NAME], the Act requires a description of the estate claimed, being one in fee simple albeit as a tenancy in common.

1. As to the balance of convenience and the undertaking proffered supporting the extension of the Caveats, [NAME]' submissions may be summarised as:

1. If the Land is sold, [NAME] will be confined to claims for compensation or damages. They will not be able to advance their equitable and contractual claims (the latter relying on the DOFA) against the Land.

2. Insofar as both parties may have equities in the Land, permitting the sale of the Land would restrict the Court's ability to fashion a remedy that reflected those interests.

3. Claims for compensation or damages are not an adequate remedy in circumstances where [NAME]' primary relief is the vindication of their interest in the Property. 4. [NAME] relied on the matters set out in the letter extracted in paragraph [47] above. 5. [NAME] were prepared to give the secured undertaking calculated as set out in the letter extracted in paragraph [50] above.

6. In reply to the [NAME]' submissions set out in [68] below: 1. [NAME]' property ([NAME] and [NAME]) (the [NAME]) is valued at more than $6.7 million with only $1.7 million mortgaged and that amount not fully drawn (although there was no evidence as to how much had been drawn down). 2. [NAME] is employed by [NAME] currently two days per week (although currently working full time in the lead up to Christmas) and will be three days per week next year. [NAME] operate a farming enterprise on the [NAME] which generates income.

3. They relied on hearsay evidence from bank and investment publications to the effect that in some places the value of rural property had increased and had been assisted by the wet weather.

4. As for the recent flooding, the Land had now dried out to the extent producers can harvest crops and spray country for next year's crops.

5. The recent flooding also meant that 2023 crops would be able to access 100% subsoil moisture and would require minimal rainfall to produce at least an average crop, all of which would be positive for a potential purchaser or lessor of the Land.

6. The [NAME] had visited the "[NAME]'s choice" on themselves by seeking a secured undertaking. They will have the option to sell the Land and to sue on the undertaking. If the Land is sold now, [NAME] will have been summarily denied a significant part of their case. That calculus demonstrates that the balance of convenience favours the extension of the Caveats.

The [NAME]' submissions 1. As to the form of the Caveats, the [NAME]' submissions may be summarised as being that the claim to an estate in fee simple was plainly wrong and was a matter of substance and not form which fell outside the scope of s 74L of the Act.

2. As to a serious question be tried, the [NAME]' submissions may be summarised as:

1. The claim to an estate in fee simple was plainly wrong because a constructive trust does not confer an estate in fee simple. This is fatal to the validity of the Caveats.

2. Assuming the correctness of [NAME]' contention set out in paragraph [63(1)] above (so that what I refer to below as the "[NAME] issue" is irrelevant): 1. the claim in the attachment to the Caveats of "an equitable interest in the land in the nature of a constructive trust" did not give rise to a right to the transfer of the estates in fee simple; and 2. there was no substance to [NAME]' "detrimental reliance" claim given the substantial benefits which [NAME] had received, including two farms and a family home for which they only paid $350,000, together with a 25% interest in [NAME] for no monetary consideration.

1. The facts set out in the statement of claim did not disclose a present entitlement in [NAME] to have the Land transferred to them.

2. Whatever equitable interest [NAME] may have, it was contingent on the satisfaction of a number of preconditions, including acquisition of the Land "on fair terms" which had not been specified or, since the dispute arose, offered.

3. The [NAME] disclosed no claim against that company. It was not a party to the DOFA. The particulars to the [NAME] did not apply to that company, which on [NAME]' own case did not have any common intention with [NAME]. The claim made against [NAME] in the statement of claim was not the claim made in the [NAME], because in terms paragraph 43 of the statement of claim (see paragraph [55] above) was a claim that the [NAME] had breached the DOFA. Nor could a [NAME] v [NAME] claim be discerned from the last bullet point in the attachment to the [NAME]. Furthermore, on any view [NAME] were only ever to have an entitlement to one-third of [NAME].

4. As appears from paragraph 30 of the defence, the DOFA "was an aspirational document only, unenforceable, and even at its highest does not create any legal obligation for [NAME] to transfer valuable assets to [NAME], for no consideration, when they each had ceased working" for [NAME]. [NAME]' entitlements were, they were premised upon the continuation of [NAME]. Clause 2 of the DOFA recognised that "circumstances may change", such a change now having eventuated with the breakdown of the relationship between the parties and the mutual position that [NAME] was at an end. The most that [NAME] can claim is a 50% interest in the Land in the winding up of [NAME]. [NAME] having come to an end, so too had any enforceable expectation as to the still future transfers referred to in the DOFA, because it was funds produced from the operation of [NAME] that would allow those transfer to occur.

5. The language of the DOFA emphasised in paragraph [21] above was too vague to give rise to a right that equity would enforce by requiring transfer of the Land to [NAME].

1. As to the balance of convenience, the [NAME]' submissions may be summarised as being that the balance of convenience did not favour extension of the Caveats because: 1. [NAME]' claim was weak.

2. The proffered $500,000 security for the undertaking as to damages, assuming it could be provided, was inadequate because it barely covered the interest that would be lost on the sale proceeds.

3. The [NAME] appeared to have minimal savings and to be, substantively, unemployed.

4. The [NAME] had a purchaser for the Land for just over $10.1 million. The evidence of the selling agent was that it was "very unlikely" that a comparable price would be achieved on re-marketing, which could take "a long time", possibly one or two years, and that the [NAME] could expect to receive "at least 10% less, possibly more" than the current sale price. Those views were based on the effect of recent severe flooding, rising interest rates and the low demand for other properties in the area. What was said to be a comparable in quality, but smaller, block had received no interest from buyers over a recent six week period. The damage to the [NAME] could be up to $3 million (interest on 4 years delay including litigation and re-marketing of $2 million, and a $1 million lower sale price), with the flooding inhibiting the capacity of the [NAME] to mitigate their loss by leasing out the Land in the meantime.

5. Even if the Court was satisfied that [NAME] had sufficient assets to meet the undertaking, if the Caveats were extended the [NAME] would be left with the "[NAME]'s choice" of bearing those substantial losses or pursuing their [NAME] for a sum which might ruin them and exacerbate the family enmity.

6. There was no suggestion the [NAME] would dissipate the sale proceeds and [NAME]'s offer to set aside $5 million from those proceeds pending the outcome of the proceedings gave [NAME] more than adequate protection. This was especially the case because if [NAME] obtained any final relief, it was more likely to be for compensation rather than orders against the Land.

Consideration – the [NAME] – form 1. This issue arises by reason of the decision of Williams J in [NAME]. The circumstances and reasoning appear from these paragraphs of her Honour's decision: "4 The estate or interest claimed by the plaintiff in the Caveat is described as an "Estate in Fee Simple" arising by virtue of "Beneficial Interest in Trust". The following details are set out in support of the claim: "Beneficiary of a constructive trust by reason of the Caveator's contribution of $1,372,958.68 towards the construction costs and development of the Property pursuant to a joint venture agreement. It would be unconscionable for the [NAME] to deny the Caveator a 50% beneficial interest." … 66 Counsel for the plaintiff conceded at the hearing of the notice of motion that the plaintiff's claimed interest in the Property is wrongly described in the Caveat as an "Estate in Fee Simple". The interest in respect of which the plaintiff claimed to have established an arguable case for the purpose of its application under s 74K of the Real Property Act was a beneficial interest under a constructive trust. It was submitted on behalf of the plaintiff that the misdescription of the estate or interest claimed in the Caveat as an "Estate in Fee Simple" is a matter of form which can and should be disregarded pursuant to s 74L of the Real Property Act. [NAME] submissions referred in very general terms to cases in which "various Judges have made it clear that under section 74L … the Court may disregard any failure of the caveator to comply strictly with the requirements as to form". It was submitted that "[t]he test is whether there is 'sufficient identification of the claimed interest'". In support of that proposition, the plaintiff relied on Mayrin DM Pty Ltd v Kaiyu Deng [2019] NSWSC 1552 at [47]. 67 For the reasons articulated by Brereton J in [NAME], supra, at [12] (extracted at [62] above), I reject the plaintiff's submissions, and accept the defendant's submissions to the contrary. The misdescription of the estate or interest claimed by the plaintiff in the Property is a matter of substance and not a mere matter of form. …"

1. While I am not bound by her Honour's decision, there is much to be said for the proposition that in the interests of consistent guidance to the profession on issues as commonly encountered as caveats, a judge of this Division should not lightly depart from a decision of another judge exercising the same jurisdiction. However, in the present case it is not necessary for me to express a view on the correctness of [NAME] because, in my respectful opinion, it is distinguishable from the case at bar for at least these reasons:

1. Her Honour proceeded on a concession by counsel. [NAME] makes no such concession.

2. As a matter of fact, the attachment to the [NAME] is much more extensive than the explanation of the interest claimed in COMMSERV.

3. Her Honour did not have the advantage of the evidence before me as to the limited options available on the [NAME] online system in relation to caveats.

1. In my respectful opinion, there is no difficulty with the description of the interest claimed in the [NAME] for two reasons.

2. First, as a matter of fact and law it is exactly the interest which [NAME] claim in this case. They claim a transfer of the fee simple in the [NAME] by reason of the constructive trust they assert.

3. Second, it is the entire [NAME] which must be read. When that is done, including the attachment setting out the claim details, it is clear what interest [NAME] claim and on what basis.

4. However, if those two reasons are wrong, then in the alternative I accept [NAME]'s alternative submission that that any statutory non-compliance with the description of the interest claimed is one which the Court can disregard under s 74L because of what I shall refer to, without disrespect, as the "[NAME] issue". [NAME] is the now ubiquitous acronym in conveyancing matters for [NAME], which at the moment is the only Electronic Lodgment Network (ELN) for the purposes of the Act and its rules. 5. [NAME]' solicitor, [NAME], gave this unchallenged evidence (emphasis added): "17. The caveats the subject of these proceedings were lodged on 13 September 2022.

18. In preparation for the lodgement of the caveats, I prepared documents containing the particulars of the facts on which [NAME]' claim is founded in compliance with Schedule 2 of the Real Property Regulation 2019. These documents are at pages 66 and 77 of the Court Book (CB).

19. I instructed a conveyancing assistant employed by my firm, [NAME], to assist me with the lodgement of the caveats using the [NAME]. 20. [NAME] [sic] claim, as stated in the documents referred to at paragraph 18 above, was "an equitable estate or interest in the land in the nature of a constructive trust". The only option available to claim such an interest using the [NAME] was to select an "Estate in Fee Simple" and then Claim Category "Beneficial Interest in Trust".

21. When attempting to enter the details supporting the claim, I was unable to type the full text of the documents referred to paragraph 18 above due to the 300 text character restriction. Consequently, [NAME] sent an email enquiry to the eConveyancing Manager at NSW Land Registry Services. A copy of this email, and the reply received from the eConveyancing Manager, is annexed and marked with the letter "E". As a result of this enquiry, it was necessary to upload the documents referred to at CB60 and 70 as separate files."

1. The [NAME] issue, as I refer to it, is what I have emphasised in the preceding extract, which was that the [NAME] had no alternative but to use the [NAME], and that system gave [NAME] no alternative other than to claim an "Estate in Fee Simple" and then use the claim category "Beneficial Interest in Trust". In my respectful opinion, this appears to be an example of the technological tail waving the legal dog. 2. [NAME]'s alternative submission was (I here reproduce his written submission with minor amendments):

1. For the purposes of s 74L of the Act there is "legal proceeding" and a question has arisen as to the "validity of a caveat lodged under a provision of this Part";

2. The question is whether the Caveats are invalid because they do not comply with s 74F and/or cl 7 of the Real Property Regulation 2019 (NSW) and or schedule 2 of the Real Property Regulation 2019 (NSW);

3. The potential invalidity is that there are insufficient particulars relating to the estate or interest to which [NAME] claim to be entitled;

4. The Caveats describe the estate or interest claimed as an "Estate In Fee Simple" by virtue of: "Beneficial Interest in Trust"; 5. [NAME] were required to describe the estate or interest as the "estate it is entitled to" by virtue of: "their status as the beneficiary of a common intention constructive trust". Other more "valid" formulations are also conceivable such as "interest as a beneficiary" by virtue of: "a claimed common intention constructive trust";

6. However, a valid description was not in reality possible because the "conveyancing rules" (see s 12E of the Act and also s 74L of the Act which picks up the definition of "conveyancing rules") required that a caveat be lodged through an ELN (see rule 8.8 of the Conveyancing Rules made under s 12E of the Act);

7. The only ELN available to [NAME]' solicitor was [NAME];

8. The [NAME] restricted the possible descriptions of the estate or interest claimed;

9. None of the possible descriptions included a "valid" description;

10. In those circumstances, s 74L operates to cure the invalidity because the system of conveyance mandated by the "conveyancing rules" has produced a conveyancing system which does not operate in a manner that enables a caveator to comply with the requirements of cl 7 of the Real Property Regulation 2019 (NSW) and / or schedule 2 of the Real Property Regulation 2019; and 11. Using the language of s 74L, [NAME] were not able to "comply strictly" with the "conveyancing rules" and therefore the "court shall disregard" the "failure" to "comply strictly" with the "conveyancing rules"."

1. I accept that submission but with what is, in my view, the necessary final step. That is that the failure to comply was "with respect to the form of the caveat" for the purposes of s 74L precisely because the form of the Caveats (which created the non-compliance) was dictated by the [NAME].

2. It may be accepted that, in terms, an estate in fee simple does not arise by a beneficial interest in a trust. The Duty List sees many claims every week relating to caveats where resulting or constructive trusts are asserted by reason of joint endeavours or common intention. They are often, but not always, advanced in the fraught circumstances of the breakdown of personal relationships. Those circumstances themselves often give rise to an approach to litigation in which every point will be taken.

3. There is a public interest, including in maintaining the accuracy and utility of the Torrens register, that where a party has a legitimate caveatable interest, they be able to record it clearly and legally correctly in a caveat so as to minimise the scope for confusion and argument. Where there is such scope, it will often lead to unnecessary, time consuming and expensive applications to the Court. There is a public interest in such applications being avoided where possible. Parties should not be left in doubt as to whether they have solved any potential misdescription or non-compliance by the detail they have provided of the claim (which as [NAME]' evidence demonstrates is limited to an arguably inadequate 300 text characters unless other steps are taken).

4. In my respectful view, the frequency of claims such as the present in relation to caveats relying on constructive or resulting trusts (I have seen four in my last fortnight as Duty Judge) warrants the [NAME] offering as the estate or interest claimed "beneficial estate or interest" (or similar) and with several claim categories to follow "by virtue of" to describe each of the possible types of trust. Because this judgment seems to me to raise a systemic issue, I will have my Associate refer it to the Minister for Customer Service and Digital Government (as the Minister responsible for the Act), the Registrar-[NAME] for their consideration.

Consideration – the [NAME] – serious question to be tried 1. [ADDRESS] accepts [NAME]'s submissions that there is a serious question to be tried as to whether the [NAME] hold the [NAME] upon a common intention constructive trust which would be enforced by the [NAME] being transferred in fee simple to [NAME]. That is the claim made in the [NAME] (including the attachment) and the Court accordingly finds that claim has or may have substance for the purposes of s 74K of the Act. I do not accept [NAME]'s submission that primarily, but not exclusively, because of the emphasised matters to which he has drawn attention in the DOFA (see paragraph [21] above), [NAME]' claim is weak. However, it is unnecessary and potentially misleading at this early stage of the proceedings to offer any further characterisation of [NAME]' prospects beyond the statutory language of s 74K.

2. Quite apart from what may have been said between the parties, and notwithstanding the parts of the DOFA emphasised in paragraph [21] above and relied upon by [NAME] for the contrary conclusion, the Court accepts that it is seriously arguable that the DOFA evidences the common intention of the parties as to how the [NAME] would be held by the [NAME] to enable its acquisition by [NAME]. The nature and sufficiency of [NAME]' detriment alleged to have been suffered in reliance on that common intention is a matter for trial, as is the question of whether the [NAME] have unconscientiously sought to depart from that intention, including by asserting an entitlement to transfer the [NAME] to a party other than [NAME]. Such unconscientiousness can be remedied by the imposition of a constructive trust as the stepping stone to an order that the [NAME] be conveyed to [NAME] as beneficiaries of the trust (assuming the whole of the Land has been found to be subject to the trust). Such relief is available, for example, in relation to unconscientious dealings (see, for example, Bale v Kimberley Development Pty Ltd [2022] NSWSC 820 per Ward P at [670] and [676(2)]) and it is clearly arguable that it is available to give effect to a common intention in an appropriate case.

3. In reaching this conclusion, I have not overlooked this evidence given by [NAME]' solicitor: [redacted] a. [NAME] would contribute the majority of the day-today work involved in running [NAME] enterprise. b. The [NAME] would slow down. c. Notwithstanding the above, the [NAME] would be entitled to: i. ongoing drawings of $2,000 p/week; ii. an annual payment of $50,000 into the defendant's superannuation account; iii. the withdrawal of a Farm Management Deposit of $230,000; iv. a reduced exposure to debt as the land was progressively transferred to [NAME], and v. the discharge of all debts owed on the other properties owned by the [NAME] ([NAME] and 2/3rds of [NAME]) which were not to be transferred to [NAME]. 11. [NAME] also accept that there is a reference in the DOFA to "progressively acquiring lands owned by [NAME] on fair terms to all concerned", however intend to adduce evidence at trial as what was meant by these terms. 12. [NAME] intend to adduce evidence at trial showing: a. what their contemplated required contribution was (both monetary and non­monetary) pursuant to the DOFA and pursuant to the understanding reached since 2013; b. that their financial forecasting was consistent with being able meet their fair contribution in 2019 and beyond; c. that they are prepared to and have the ability to make further contributions to the [NAME] consistent with the Court's findings as to what is fair and reasonable having regard to the evidence. …"

1. That evidence fortifies my view, which I expressed to [NAME] in the course of argument, that this was almost certainly a case (given the terms of the DOFA) where to obtain the relief they sought, [NAME] will have to do equity towards the [NAME]. However, what that might be can only be determined at the end of the hearing. For present purposes it is sufficient that I observe that the fact that [NAME] may have to do equity does not detract from the Court's conclusion that their claim to a transfer of the [NAME] in fee simple has or may have substance.

Consideration – the [NAME] – balance of convenience 1. The primary reason why the Court accepts the submission that the balance of convenience favours the extension of the [NAME] is that if it is not extended, this would have the certain consequence of summarily terminating [NAME]' proprietary claim to the [NAME], being a claim which the Court has found has or may have substance. The secondary reasons are the matters set out in subparagraphs 6.3(a), (c), (d) and (e) of the letter extracted in paragraph [47] above.

2. When compared to the certain summary termination of [NAME]' proprietary claim, how detrimental the extension of the [NAME] would be for the [NAME] is, on the evidence, far less certain, for reasons which I will next set out.

3. There is no evidence from the current purchaser (even by solicitor's correspondence, for example) as to what may happen to the contract for sale. Nor, for understandable reasons, does [NAME] say anything on that topic. His evidence, set out in paragraph [49] above, assumes and is fearful of the loss of the present sale, but there is no evidence before the Court that enables the likelihood of that assumption proving true to be assessed. In my respectful view, in the absence of evidence, for the Court to conclude that the sale at the current price will be lost forever would be speculation. There is obviously a chance it may be lost, but how great that chance is cannot be assessed. It has certainly been my experience both at the bar and on the bench that an inability to complete a contract for the sale of land pending third party legal proceedings does not always lead to termination of the contract.

4. Nevertheless, the view to which I have come would be the same even if the evidence were that the current sale will be lost forever and the deposit returned. This is because the evidence is too general and speculative to enable the Court to make any conclusion about any future sale price and how long any sale might take to achieve. To describe the evidence as such is not a criticism of the parties, who have sought to provide the best evidence they can in urgent circumstances. Furthermore, assuming no deleterious effect from the floods, the only relevant, objective fact currently available to the Court – that the present sale was achieved within three months – suggests that fear of a long delay if the blocks have to be put back on the market may be unrealistic.

5. In this regard I have given careful attention to the hearsay evidence of the current selling agent, [NAME], in conversation with the [NAME]' solicitor: [redacted] [NAME]: Very unlikely. The whole area has been damaged by floods. I'd say they'll have to take at least a 10% lower price, possibly more. With interest rates going up, the property might also sit on the market for a long time. 1, 2 years maybe. Who knows? [NAME] didn't get a lot of enquiries aside from the current buyer."

1. As I read that evidence, it is heavily influenced by a view as to the effect of the flood damage. However, both common sense and some of the evidence (see paragraph [65(6)(d) and (e)] above) suggests that there will be no ongoing damage. As for the balance of [NAME]'s statement, to his credit he qualifies it by "who knows". With that qualification, and the speculative tone of the entire extract, it is no criticism of [NAME] that the Court concludes that his statement is of insufficient weight to influence the balance of convenience in favour of the [NAME].

2. Furthermore, as a matter of discretion, I have taken into account that [NAME] took a calculated risk in entering into the contract for sale of the [NAME] with knowledge of [NAME]' claim and these proceedings having been commenced. I do not regard the alleged doubts entertained about [NAME]' undertaking at the time set out in the correspondence extracted in paragraphs [37] to [44] above as sufficient to negative this consideration.

3. Also highly relevant to the balance of convenience is the question of the undertaking as to damages. This is clearly a case where the undertaking should be required. By reference to the evidence set out in paragraph [65(6)(a) and (b)] above, the Court is satisfied an undertaking from [NAME] would be valuable. Furthermore, it is appropriate that, as proferred by [NAME], it be secured over the [NAME] to the amount of $500,000 before 2 February 2023 (which is not to be understood as a limit on the amount recoverable pursuant to the undertaking as to damages). That amount of security is acceptable in the first instance for the reasons set out in the correspondence extracted in paragraph [50] above. [ADDRESS] will also require an undertaking that [NAME] will not deal with or further encumber the [NAME] without the consent of the [NAME] (not to be unreasonably withheld) or further order of the Court.

4. By way of summary, the Court will exercise its discretion under s 74K by confirming the current order extending the [NAME] until further order, and grant leave for [NAME] to file a fresh caveat in relation to the land held by [NAME] (as to which see paragraphs [95] to [97] below) upon [NAME]:

1. Giving to the Court the usual undertaking as to damages;

2. Undertaking to the Court that they will secure their undertaking as to damages in the first instance by security over the [NAME] in favour of the [NAME] in the sum of $500,000 in a form to the reasonable satisfaction of the [NAME] to be maintained until further order or the agreement of the parties;

3. Undertaking to the Court that they accept that any liability they may have to the [NAME] by reason of the usual undertaking as to damages is not limited to the secured amount of $500,000;

4. Undertaking to the Court that after effecting the security referred to in sub-paragraph (b), they will not deal with or further encumber the [NAME] without the consent of the [NAME] (not to be unreasonably withheld) or further order of the Court; and 5. Undertaking to the Court that they will promptly apply for expedition of these proceedings in the new law term.

Consideration – the [NAME]

1. Even allowing for the conclusion I have reached in paragraphs [69] to [81] above, I accept [NAME]'s submission that the claim in the [NAME] does not have substance for the reasons set out in paragraph [67(5)] above, including as to the lack of efficacy in the last bullet point in the attachment to that caveat to make out a [NAME] v [NAME] claim against [NAME]. By reason of that conclusion, I am bound by s74K to dismiss the Motion in relation to the [NAME], but I will do so on terms designed to preserve the status quo until a fresh caveat is filed in accordance with the next paragraph.

2. During the course of argument, the possibility was raised that the Court might conclude that the [NAME], but not the [NAME], would be extended if [NAME]'s submissions were accepted. [NAME] submitted that given the dispute is about all of the Land, that result would almost certainly excite an application by [NAME] under s 74O of the Act for leave to file a fresh caveat in lieu of the [NAME]. It is consistent with the overriding purpose, not least given the time of the year, that I should pre-empt that course by indicating that I will grant leave under s 74O for a fresh caveat to be filed making the [NAME] v [NAME] claim and specifying only a one-third interest in [NAME]. 3. [ADDRESS] is satisfied that such a claim, having as its first step the alleged common intention constructive trust over the Land, has or may have substance. The balance of convenience considerations which I have set out in relation to the [NAME] apply equally in favour of permitting the fresh caveat to be filed over the blocks held by [NAME] subject to the undertakings set out in paragraph [94] above. [NAME] may wish to clarify the pleading of this claim by amending the statement of claim is a matter for another day.

Conclusion 1. Because the adequacy of the security to be given for the undertaking as to damages at least in part is affected by the possibility of the Land being leased pending the conclusion of this litigation, I commend to the parties' consideration by way of suggestion only that the most logical outcome in both their interests (both to mitigate potential loss and limit liability on the undertaking) is for an agreement to be reached that it is [NAME] who should be permitted work the Land in the meantime. Any profits of that work could be held to be disbursed in accordance with the outcome of the proceedings depending upon who is determined to be entitled to the Land.

2. I will discuss with the parties the orders I propose to make to give effect to these reasons. Unless absolutely necessary, any issues which might arise about the implementation of these orders should not be taken to the Vacation Judge, but should be raised for my determination at the directions hearing I propose to fix before me on 31 January 2023 (still being a date before the contracts for sale of the Land are due to settle). While my preliminary view is that the costs of the Motion should follow the event, being success on the part of [NAME], I will also stand over any argument as to costs to the directions hearing. Apart from anything else that may be required on that date, I will then list the matter for mention before the Expedition Judge on 3 February 2023.

********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 December 2022