Supreme Court New South Wales

• Medium Neutral Citation: Makrypodis v Eleisawy [2014] NSWSC 1429
• Hearing dates: 15 October 2014
• Decision date: 17 October 2014
• Jurisdiction: Equity Division
• Before: Lindsay J

Decision

Orders for the continuation of caveats on an interlocutory basis, coupled with directions designed to facilitate an expedited hearing of a suit for orders for specific performance of seven (unrelated) contracts for the purchase of land.

• Catchwords: REAL PROPERTY - Torrens title - Caveats Against Dealings - Extension - Orders made for the continuation of caveats on interlocutory basis pending final determination of proceedings
• Legislation Cited: Civil Procedure Act 2005 NSW, ss 56-58; Evidence Act 1995 NSW; Real Property Act 1900, ss 74J, 74K
• Cases Cited: Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 68 [19] and 81-82 [65]; Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618 at 622-623; CJ Redman Construction Pty Limited v Tarnap Pty Limited [2005] NSWSC 1011; 12 BPR 23395 at [3]; Dasreef Pty Limited v Hawchar (2011) 243 CLR 588 at 602 and 6-5; Jensen v Giugni (1994) 6 BPR 13, 667 at 13,668-13,669; BC 9403433 at 4-5.; Kolback Securities Limited v Epoch Mining NL (1987) 8 NSWLR 533 at 535; Makita (Australia) Pty Limited v Sprowles (2001) 52 NSWLR 705; NL (1987) 8 NSWLR 533 at 535); Rutledge v Jaluit Pty Limited (1991) 6 BPR 13,826, 13,829-13,830; BC 9101466 at 9-10; Sutherland v Vale [2008] NSWSC 759; 14 BPR 26, 255 at [10]-[11]
• Texts Cited: -
• Category: Interlocutory applications
• Parties: Con Makrypodis First Plaintiff; Dimitra Makrypodis, Second Plaintiff; Danielle Truden, Third Plaintiff; Nadhiesh Ruchiran Kariapperuma, Fourth Plaintiff; Ukwattage Nomintha Yuvini Wijetunge, Fifth Plaintiff; Raymond Kenneth Lenton, Sixth Plaintiff; Melissa Jane Lenton, Seventh Plaintiff; Ariel Evangelista, Eighth Plaintiff; Rhodora Evangelista, Ninth Plaintiff; Xinli Wu, Tenth Plaintiff; Masato Fujikawa, Eleventh Plaintiff; John Makrypodis, Twelfth Plaintiff; Gina Makrypodis, Thirteenth Plaintiff; Medhat Eikotb Mohamed Eleisawy, Defendant
• Representation: Counsel: Plaintiffs: Anita Power; Defendant: Dr Christopher Birch SC; Solicitors: Plaintiffs: Leverage Solicitors; Defendant: Alexanders Lawyers
• File Number(s): 2014/00279121

Judgment

1 Before the Court is an interlocutory application (by the plaintiffs) for an order (pursuant to the Real Property Act 1900 NSW, s 74K) that the operation of seven separate caveats, affecting seven distinct lots of land, all of which have the defendant as their registered proprietor, be extended pending the final determination of a summons in which each plaintiff respectively claims, in relation to his or her particular contract for the purchase of land from the defendant:

(a) a declaration of entitlement to an order for specific performance;

(b) an order that the contract be specifically be performed; and

(c) in the alternative, an award of damages against the defendant for wrongful rescission of the contract.

2 The 13 plaintiffs in the proceedings represent seven distinct commercial interests. In various combinations, they are named as purchasers of land sold by the defendant in seven distinct contracts, respectively entered into between 27 May 2013 and 11 November 2013. They have joined together as plaintiffs because, although there are seven separate contracts, they (as purchasers) have a common complaint against the defendant (as vendor) arising out of commonly expressed terms in each contract and the defendant's reliance upon those terms in his purported rescission of the several contracts.

3 The defendant is a land developer. Each of the contracts he entered with the plaintiffs provided for the sale of a lot in an unregistered plan of subdivision.

4 The land the subject of that plan is vacant.

5 Each contract contained terms, the effect of which may be summarised as follows:

(a) Settlement of the sale was to take place 14 days from the date upon which the purchaser's solicitor was served (by the defendant vendor) with notice of registration (by the Registrar General) of a deposited plan giving effect to the subdivision upon which the sale of the subject lot was predicated: special condition 6.1, read with special condition 2.1.

(b) The contract was subject to, and condition upon, the registration of an identified plan of subdivision as a Deposited Plan: special condition 3.2.

(c) The defendant vendor promised that he would, by 30 June 2014, complete the construction of roads (the subject of a development consent originally granted before the date of the earliest of the plaintiffs' contracts) necessary for the subdivision to be effected on or before that date: special condition 3.1, read with special condition 2.1.

(d) The defendant promised that he would use his best endeavours to have the plan registered as a Deposited Plan by 30 June 2014: special condition 3.5, read with special condition 2.1.

(e) Subject to special condition 3, if the plan was not registered as a Deposited Plan by 30 June 2014, either party to the contract (ie, the defendant vendor or, speaking generically, the plaintiff purchaser) could rescind the contract by notice in writing to the other party, provided that this right of rescission was to cease following registration of the plan: special condition 3.3.

(f) A fair and reasonable extension of time was to be allowed to the defendant vendor for delays through causes beyond his control including but not limited to civil commotion, industrial disputes, shortages of or delays in delivery of materials, fire or accident or malicious damage to works (defined as road construction) in the course of construction, weather and the like, and delays by any authority in granting any necessary consent or approval or by the Land and Property Information Office (the Registrar General, by another name) in approving or registering the plan or any related document: special condition 3.4, read with special condition 2.1.

6 On 5 June 2014 the local council responsible for doing so, issued a Subdivision Certificate approving the form of the plan to be lodged for registration by the Registrar General as a Deposited Plan.

7 On 6 June 2014 the defendant lodged the approved plan with the office of the Registrar General for registration of a Deposited Plan.

8 On 23 June 2014, the Registrar General issued requisitions to the defendant.

9 The critical date, 30 June 2014, passed without the plan being registered as a Deposited Plan.

10 The plan was, in due course, registered as a Deposited Plan; but not until 25 August 2014.

11 In the meantime:

(a) on 3 July 2014 the defendant served written notices purporting to rescind six of the seven contracts at issue in these proceedings.

(b) on 16 July 2014 he (the defendant) served a written notice purporting to rescind the seventh contract.

12 The plaintiffs' interlocutory application was conducted on the basis that it is not necessary to distinguish between the particular terms, and the particular circumstances, of the seven contracts the continuing operation (or discharge) of which lies at the heart of what is, essentially, a factual dispute about whether the defendant did, or did not, use his best endeavours to have the plan of subdivision registered as a Deposited Plan on or before 30 June 2014.

13 For present purposes, it is sufficient to record that:

(a) each plaintiff disputes the validity of the defendant's purported notice of rescission of his or her particular contract with the defendant.

(b) each plaintiff contends that, in breach of special condition 3.5, the defendant failed to use his best endeavours to have the plan of subdivision registered as a Deposited Plan by 30 June 2014 and that, by reason of that breach, no contractual right of rescission arose in the defendant's favour.

(c) based on that contention, each plaintiff lodged, or was party to lodgement of, a caveat against the title of the lot affected by his or her contract.

(d) since his purported rescission of the seven contracts the subject of these proceedings, the defendant has:

(i) entered contracts for resale of five of the seven lots; and

(ii) served on each plaintiff a lapsing notice (under the Real Property Act 1900, s74J) designed to cause each, and all, of the seven caveats the subject of these proceedings, to lapse.

(e) the prices at which the defendant has sold the five lots the subject of a resale, are about $100,000 higher than the prices agreed in the earlier, corresponding contracts between the plaintiffs and the defendant.

(f) on 23 September 2014 the plaintiffs filed their summons in a co-ordinated attempt by them to enforce their respective contracts.

(g) on 13 October 2014 the defendant, in compliance with a direction of the Court designed to ensure that all questions in dispute might be identified with greater precision, filed a cross-summons seeking, in relation to each of the seven contracts at issue, a declaration that the defendant has lawfully terminated the contract pursuant to special condition 3.3.

14 Management of the principal proceedings has been rendered more difficult by the absence of pleadings, and by the plaintiffs' claimed inability to provide full particulars of their case without better and further discovery of documents by the defendant.

15 The plaintiffs have had the benefit of orders for the production of documents, by the defendant, by categories. However, the implementation of those orders (absent an order for the defendant to provide discovery in the form of a verified list of documents) has led to inconclusive, ongoing disputation.

16 The defendant complains that the plaintiffs have not articulated a proper case for relief, interlocutory or final. The plaintiffs complain that any inadequacy in their articulation of a case has its foundations in an alleged failure by the defendant to provide full and timely disclosure of documents.

17 The defendant complains that any inadequacy of disclosure on his part is the result of a failure on the part of the plaintiffs to articulate their case with precision, and to define with appropriate moderation the documents they seek. The defendant contends, and the plaintiffs deny, that he has opened his records to view as fully, and as reasonably, as he can within the time constraints that all parties say press upon them in pursuit of an expedited determination of the proceedings.

18 Presentation of the plaintiffs' case, at least at this interlocutory stage of the proceedings, depends heavily upon the interim report of an expert (a Certified Practising Planner, the holder of a real estate agent's licence, a Bachelor of Building and the holder of a Graduate Diploma in Urban and Regional Planning) following his review of documents produced by the defendant, informally, in compliance with the Court's orders.

19 The defendant complains that expressions of opinion contained in that report are inadmissible because of a failure to comply with the formal requirements of s 79 of the Evidence Act 1995 NSW, as expounded in Dasreef Pty Limited v Hawchar (2011) 243 CLR 588 at 602 and 605 and Makita (Australia) Pty Limited v Sprowles (2001) 52 NSWLR 705. The plaintiffs respond by noting the interlocutory character of the business presently before the Court, and their consistently expressed need for better and further discovery.

20 The debate goes on and on, each complaint matched by a counter complaint.

21 Passing reference has been made to the Court's Practice Note SC Eq 11 (Disclosure in the Equity Division), which regulates the availability of orders for the disclosure of documents in the preparation of proceedings for hearing. However, as the terms of the Practice Note accommodate the particular circumstances of each case, the primary focus of attention has been on the existence or otherwise of "circumstances necessitating disclosure" at this stage of the principal proceedings and definition of "the real questions in dispute in the proceedings".

22 At a directions hearing held (on 7 October 2014) in anticipation of the hearing (on 15 October 2014) of the interlocutory application presently before the Court, the following notations and orders (amongst others) were made by me:

"3. NOTE that, subject to any order of the Court granting leave for other questions to be litigated, the substantive questions for determination in the principal proceedings are limited to:

(a) whether the defendant has breached the subject contracts by failing to use his best endeavours to have a plan of subdivision registered as a deposited plan by the registration date in accordance with special condition 3.5; and

(b) whether, if the defendant has breached the contracts, the plaintiffs' application for an order for specific performance should be dismissed because of laches or delay on the part of the plaintiffs.

4. ORDER that, if any party seeks to raise a further question for determination in the principal proceedings, that party do so by a notice of motion (seeking the leave of the Court) returnable before the Court at 10.00am on 15 October 2014.

5. NOTE that the plaintiffs contend that they are unable to file affidavits today (7 October 2014), in accordance with orders made on 26 September 2014, without the benefit of further and better discovery from the defendant.

6. NOTE that the defendant denies any want of timely or proper discovery on his part.

7. NOTE that the discovery to be given by the defendant pursuant to orders made on 26 September 2014 is limited to documents relevant to the question whether the defendant has breached the subject contracts by failing to use his best endeavours to have a plan of subdivision registered as a deposited plan by the registration date in accordance with special condition 3.5.

8. NOTE that the parties are continuing to have discussions about the nature and scope of, and practical arrangements for, the discovery for which the orders made on 26 September 2014 provide."

23 At the same directions hearing orders were also made (as orders 10 and 11) granting leave to the plaintiffs to issue and serve, on short notice, subpoenas for the production of documents addressed to nominated third parties. Those subpoenas were to be made returnable before the Registrar on 13 June 2014.

24 Neither side of the record moved the Court, on 15 October 2014, for a grant of leave to raise a question for determination beyond the two questions formally noted in paragraph 3 of the notations and orders made on 7 October 2014.

25 On the contrary, both sides of the record accepted, on 15 October 2014, that the substantive questions for determination in the principal proceedings are limited to:

(a) whether the defendant has breached the subject contracts by failing to use his best endeavours to have a plan of subdivision registered as a deposited plan by the registration date in accordance with special condition 3.5; and

(b) whether, if the defendant has breached the contracts, the plaintiffs' application for an order for specific performance should be dismissed because of laches or delay on the part of the plaintiffs.

26 On the hearing of the plaintiffs' interlocutory application (on 15 October 2014):

(a) the defendant accepted that, but for his purported rescission of the respective contracts of the plaintiffs, each plaintiff would have a caveatable interest in his or her designated lot, such interest being commensurate with his or her entitlement (if any) to an order for specific performance.

(b) the defendant expressly took no point about what might fairly have been described as a formal defect in the description of the "estate or interest" claimed in at least one of the caveats the subject of the proceedings.

(c) the parties agreed that the availability or otherwise of an order for specific performance to each of the plaintiffs depends upon the due resolution of their factual dispute about whether the defendant did, or did not, use his best endeavours to have a Deposited Plan registered by 30 June 2014.

(d) the plaintiffs accepted that there is no evidence to suggest that the purchasers named in the five contracts of re-sale had notice of the plaintiffs' respective claims to the land when they entered those contracts of re-sale.

(e) the defendant did not contend that any undertaking as to damages given to the Court by the plaintiffs, as a condition of an order that the operation of their respective caveats be continued, would be worthless or otherwise such as to require support by an order that the respective caveators provide security for their due performance of the undertaking.

27 The plaintiffs did not, during the course of the interlocutory hearing, contend that the defendant would not be able to meet a damages award should they succeed at a final hearing of the proceedings, but fail to secure an order for specific performance. Nevertheless, they reserved a right to undertake further investigation of the defendant's financial circumstances should they not obtain an order for the continued operation of their caveats.

28 In the course of debate on the hearing of the interlocutory application the defendant, at my invitation, proffered (as relevant to the balance of convenience) an undertaking to the effect that, should the caveats be allowed to lapse (or, having been extended on an interlocutory basis pending delivery of judgment, be ordered to be withdrawn), he would provide security for the plaintiffs' damages claims in the total sum of $700,000, calculated as an allowance of $100,000 for each contract the subject of the litigation.

29 The defendant contends, and the plaintiffs do not dispute, that the plaintiffs bear the onus of establishing a case for continuing operation of the caveats. The plaintiffs bear the onus, more especially, of proving that there is, in their allegation that the defendant did not use his best endeavours to have the plan of subdivision registered as a Deposited Plan by 30 June 2014, a serious question to be tried.

30 The parties agree that, upon the hearing of an application for an order that the operation of a caveat be extended on an interlocutory basis, the applicant must prove:

(a) the existence of a serious question to be tried; and

(b) that the balance of convenience favours an order for extension of the caveat's operation.

31 It is common ground that on an application for the extension of the operation of a caveat, a test which the Court ordinarily applies is whether it would, in the circumstances of the particular case, grant an interlocutory injunction to protect the estate or interest claimed in the caveat, and that this, accordingly, involves a consideration whether there is a sufficiently seriously arguable case for final relief to justify maintenance of the caveat, having regard to the balance of convenience: CJ Redman Construction Pty Limited v Tarnap Pty Limited [2005] NSWSC 1011; 12 BPR 23395 at [3].

32 The guidance available from consideration of an application for an interlocutory injunction (discussed in cases such as Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 68 [19] and 81-82 [65] and Kolback Securities Limited v Epoch Mining NL (1987) 8 NSWLR 533 at 535) must be read in the context of the Court's statutory mandate.

33 So far as may be material, s 74K(2) of the Real Property Act provides that, on the hearing of an application for an order extending the operation of a caveat following the service of a lapsing notice, the 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 the Court, or may make such other orders as it thinks fit, but, if [the] Court is not so satisfied, it shall dismiss the application."

34 The Court is thus, ultimately, directed to consider whether a caveator's claim "has or may have substance": Sutherland v Vale [2008] NSWSC 759; 14 BPR 26, 255 at [10]-[11]; Jensen v Giugni (1994) 6 BPR 13, 667 at 13,668-13,669; BC 9403433 at 4-5.

35 The two elements of "serious question to be tried" and "balance of convenience" involve (or, at least, may involve) overlapping considerations.

36 That is so, particularly where, as here, an applicant contends that his, her or its ability to prove a case at trial and, in the meantime, proof of the existence of a serious question to be tried depends on the availability of an order for the production of documents.

37 In that context, case management considerations may intrude on an assessment of the strength of an applicant's case; factors affecting the balance of convenience; and the availability, now or prospectively, of evidence bearing upon the likely course, and outcome, of proceedings.

38 Upon a consideration of whether a caveator's claim "has or may have substance" within the meaning of the Real Property Act, s 74K(2), it is incumbent upon the Court to take into account the case management principles for which the Civil Procedure Act 2005 NSW, ss 56-58, provide. In the context of a particular case, that may require express consideration of what orders may be required for the just determination, and efficient disposal, of proceedings so as to advance the dictates of justice. Where there is an element of uncertainty as to a caveator's prospective entitlement to ultimate relief, the Court must consider what course is best calculated to achieve justice between the parties, in the circumstances of the particular case, pending the resolution of uncertainty, bearing in mind the consequences of any order for parties who are, or may be, affected by it.

39 It is open to the Court, in discharging the judicial function conferred on it by s 74K(2), to allow to a caveator a reasonable time within which to secure the benefit of interlocutory processes such as those governing the discovery of documents: Rutledge v Jaluit Pty Limited (1991) 6 BPR 13,826, 13,829-13,830; BC 9101466 at 8-10; Jensen v Giugni (1994) 6 BPR 13,667 at 13,668-13,669; BC 9403433 at 4-5.

40 These proceedings require exploration of that territory. The plaintiffs contend that, to establish the case they seek to make at a final hearing, they need the benefit of further and better discovery, aided by the Court's case management powers. The defendant contends that the plaintiffs have had more than a sufficient time, already, to articulate their case with precision and to adduce, in an admissible form, evidence establishing a prima facie case.

41 The plaintiffs' case for an order that the operation of the subject caveats be extended depends largely, at least in presentation, on opinions expressed by their expert (Mr BM Winning).

42 As an illustration of their flavour, those opinions include general statements to the following effect:

"10. I am of the opinion, based on the documents I have reviewed and from my experience in planning, property development and building, that the defendant did not use his best endeavours to have the Plan registered as a Deposited Plan by the registration date.

11. In my opinion, the defendant severely under-funded and under-resourced this project and failed to anticipate normal expenditure on sub-division development costs. The documents I have reviewed show that the defendant was advised in a timely manner as to when certain costs were required to be paid, often many months in advance of the date that the expenditure was required. Notwithstanding this advice, the defendant failed to allocate, or was incapable of allocating due to under-funding of the project, the funds necessary to settle the development costs and contractors' invoices as they fell due, causing various delays and stoppages - suspensions in work.

12. My review of the documents shows that the defendant's conduct from the letting of [a contract to a sub-contractor] and continuing for the duration of the contract works caused a number of delays in the registration of the Plan [including four examples of alleged failures and delays articulated in the balance of this paragraph]... .

13. As a preliminary estimate, I consider that the above failures and defaults by the defendant caused delays in the development of at least two and a half months in the period from April 2013 until June 2014.

14. The evidence of slow payments to subcontractors and consultants are [sic] abundant, from the documents I have reviewed, and go back before the contract works commenced. This has also delayed the project. However, the extent of the delays caused is difficult to presently quantify in the limited time available to review the available documents and prepare this affidavit. ...

18. There may be other failures and delays by the defendant which will become apparent upon a more extensive review of the documents produced.

19. I note that my opinion as set out above may change or be supplemented upon undertaking a more extensive review of the documents produced for the purposes of producing an expert's report for use in these proceedings. ..."

43 These statements of opinion, lying at the heart of the plaintiffs' interlocutory application, could not be admitted as evidence of any material fact or as evidence of an opinion material to a contested fact, on a final hearing.

44 However, the evidence of the expert (including these statements of opinion) can, and in my opinion should, be admitted as evidence probative of the nature of the case sought to be made by the plaintiffs, and the existence of reasonable grounds for such a case, contingent upon further inquiries being made in the course of preparations for a final hearing.

45 The expert's evidence is relevant to, and probative of, the question whether (in terms of the Real Property Act, s 74K(2)) the plaintiffs' claim has, or may have, substance. That is a question related to, but different from, the question (taken, for example, from Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618 at 622-623, as discussed in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 81-82 [65]) whether the plaintiffs have made out a prima facie case in the sense that, if the evidence remains as it is, there is a probability that, at a final hearing, they will be held entitled to relief.

46 Even so viewed, the persuasive value of the opinions expressed is limited by: (a) the comparative dearth of facts deposed to as an evidentiary foundation for the opinions expressed; and (b) countervailing evidence adduced from the defendant's project manager (Mr SA Brunner), with elaboration of facts at a general level of abstraction, to the effect that he had used his best endeavours to procure registration of the Deposited Plan as soon as possible and, in any case, by 30 June 2014.

47 The evidence adduced on behalf of the defendant is not, itself, wholly free of the criticism directed by the defendant at the plaintiffs' evidence. Both sides of the record have laboured under time constraints.

48 Recognition of factors such as these drives the Court, necessarily, to a consideration of case management issues (principally whether the plaintiffs have had a sufficient, fair opportunity to avail themselves of the Court's processes for compulsory disclosure of documents in order to hold them to their obligation to articulate, and prove, a precise case) and the potential availability of an expedited final hearing.

49 Ultimately, an exercise of intuitive judgment about the future course of the proceedings may be required in addressing both the question whether there is a serious question to be tried and the question whether the balance of convenience favours an order for extension of the plaintiffs' caveats, remembering that the statutory test (under Real Property Act, s74K(2)) is, more precisely, whether the Court is satisfied that the plaintiffs' claim "has or may have substance".

50 The terms in which the plaintiffs' expert's opinions are expressed are important.

51 On the one hand there is an expression of opinion favourable to the plaintiffs' case on the ultimate question whether the defendant was in breach of his best endeavours obligation, supported by ancillary expressions of opinion about the defendant's application of resources to the development project and a "preliminary estimate" that "failures and defaults by the defendant" caused delays in the development of at least two and a half months in the period from April 2013 until June 2014.

52 On the other hand, the expert's report is heavily qualified by reference to the preliminary character of his investigations to date and an unfulfilled need on the part of the plaintiffs to articulate a case that takes into account (for example) the entitlement of the defendant to have taken into account `his entitlement, under special condition 3.4 of the standard contractual terms, to "a fair and reasonable extension of time" by way of allowance "for delays through causes beyond [his] control".

53 In keeping with the interlocutory nature of the plaintiffs' application for an order extending the operation of the subject caveats, the evidence in support of, and in opposition to, the application was adduced by affidavit and neither side sought to cross examine the other's deponents.

54 That leaves the Court with a decision to be made within the following parameters:

(a) the plaintiffs each assert a claim to an equitable entitlement to land that is capable of supporting a caveat.

(b) whether that entitlement can be established at trial depends on the outcome of a contest of fact, principally focussed on whether the defendant did or did not use his best endeavours to procure timely registration of a Deposited Plan.

(c) albeit not in a form sustainable as admissible at a final hearing, a suitably qualified expert has expressed (within the constraints of time available to him, and to the parties generally, in dealing with the logistics of discovery processes) an opinion, apparently both grounded in fact and responsible, to the effect that there is a substantial question about whether the defendant did, or did not, use his best endeavours to procure a timely registration of a Deposited Plan.

(d) albeit that it too may lack the requisite form to be admissible at a final hearing, evidence adduced on behalf of the defendant is to the contrary effect.

(e) the Court is not in a position, on an interlocutory basis, to resolve disputed questions of fact underlying the parties' competing evidence.

(f) a resolution of those factual disputes can only be had at a final hearing in preparation for which the plaintiffs have had a fair opportunity for case preparation.

55 I accept that, notwithstanding the plaintiffs' complaints about discovery, the defendant has endeavoured to provide them with "informal discovery" without undue delay or expense. I accept, also, that an order for formal discovery is not necessarily essential for a fair disposition of the proceedings on an expedited basis, albeit that the plaintiffs may regard it as highly desirable.

56 At this stage of the proceedings, having regard to the course of the parties' correspondence and the need to review the nature and adequacy of the defendant's endeavours to procure timely registration of a Deposited Plan, I am unable to attribute to the plaintiffs any delay material to denial of an order for specific performance at a final hearing or a determination that, pending the determination of such a hearing, their caveats should be allowed to lapse.

57 I am conscious of the plaintiffs' submission that the primary object of their summons is to secure performance of their respective purchase contracts and that a denial of the continuing, interlocutory operation of their caveats would, in a practical sense, constitute a summary disposal of their claims for specific performance. Albeit that they may be left with an entitlement to damages, which might be secured by an undertaking such as that proffered by the defendant in the course of argument, an order having the effect of terminating the interlocutory operation of the caveats would, as the plaintiffs contend, destroy the (primary) subject matter of the plaintiffs' contracts without allowing them a right to be heard on a final basis.

58 I am satisfied that the plaintiffs' claims "may have substance" within the meaning of the Real Property Act, s 74K(2) and that an extension of the operation of their caveats (subject to undertakings as to damages and expedition) is appropriate. There is, in my judgement a sufficiently seriously arguable case for final relief to justify the maintenance of the caveats, having regard to the balance of convenience and taking into account the fact that, since his purported rescission of the plaintiffs' contracts, the defendant has entered into fresh, competing contracts (in the case of five lots) in circumstances in which, on the current evidence, the new purchasers must be taken as having had no notice of the plaintiffs' claims.

59 The plaintiffs have articulated a case for specific performance which is theoretically open to them, subject to proof of the alleged failure of the defendant to use his best endeavours in securing timely registration of a Deposited Plan. Their expert's report provides (albeit incomplete) particulars of that case. That they have had a practical need to call in aid the Court's compulsory processes for the disclosure, or production, of documents is both manifest and unremarkable. Some review of the defendant's management of the project development so far as it bears upon the timeliness of registration of a plan of subdivision is, in the context of the current case, necessary because the defendant's failure (if any) was not a failure to have a deposited plan registered, but a failure to have one registered in a timely manner.

60 I cannot, as the defendant would have me, conclude that the plaintiffs have had such an opportunity to avail themselves of the Court's interlocutory processes that it would be unreasonable to allow them more time to prepare their evidence with the benefit of case management procedures leading (optimally) to an expedited final hearing.

61 In these circumstances, in the absence of any doubt cast upon the plaintiffs' capacity to meet their respective undertakings as to damages, formal notations and orders should be made to the following effect:

(a) Upon:

(i) the plaintiffs' continuing undertakings as to damages; and

(ii) the plaintiffs' giving to the Court an undertaking that they will make an application to the Expedition Judge for an expedited final hearing of the proceedings, and that they will exercise due diligence in preparation of the proceedings for an expedited final hearing,

the plaintiffs' caveats should be allowed to continue in operation pending the final determination of the proceedings or further order.

(b) An order should be made for the proceedings to be listed before the Expedition Judge on 24 October 2014, with a direction that the plaintiffs file a notice of motion for expedition returnable at that time.

(c) Orders should be made to define with greater precision (whether by pleadings or otherwise) the two substantive questions proffered to the Court for final determination, allowing for the fact that the first question is advanced by the plaintiffs and the second is advanced by the defendant.

(d) Supplementary orders for the disclosure of documents (including orders for the service of subpoenas and notices to produce, but not necessarily extending to an order for formal discovery by way of verified lists of documents) should be made without delay.

62 If the plaintiffs should fail to prosecute their case with expedition or (after they have clearly had a reasonable opportunity to avail themselves of the Court's processes for discovery, the production of documents and the administration of interrogatories, as the nature of their case may require) should they fail to particularise their case with sufficient clarity to enable the defendant fairly to meet it, it would be open to the Court to reconsider the continuing operation of their caveats: Cf, Rutledge v Jaluit Pty Limited (1991) 6 BPR 13,826 at 13,829-13,830; BC 9101466 at 9-10.

63 At the conclusion of oral argument on 15 October 2014, an interlocutory order was made for the continuation of the subject caveats until further order.

64 That being so, it is not necessary, now, to discharge or vary the order for extension of the caveats, but to confirm that their continued operation is subject, not only to a continuing undertaking as to damages, but also to an undertaking by the plaintiffs to apply for, and proceed with, expedition.

65 I will allow the parties an opportunity to make submissions about the case management, and costs, orders to be made. However, I incline to the view that the appropriate order for costs (having regard to the course and pendency of continuing disputes about discovery) is that the costs of the plaintiffs' application for extension of the caveats should be the parties' respective costs in the proceedings.

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Decision last updated: 22 October 2014