New South Wales Supreme Court CITATION : McKeand & Anor v Thomas & Anor [2005] NSWSC 419 HEARING DATE(S) : 19 April 2005 JUDGMENT DATE : 19 April 2005 JURISDICTION : Equity Division JUDGMENT OF : Palmer J DECISION : Caveat extended until further order. CATCHWORDS : CAVEAT - DISCRETION - Application to extend caveat - undertaking inter partes previously offered by registered proprietor - discretion whether to extend. CASES CITED : Harvie v Stevens [2004] NSWSC 1217 Ross Tyndall McKeand - First Plaintiff Diane Elizabeth McKeand - Second Plaintiff PARTIES : Mareta Thomas - First Defendant Fred Thomas - Second Defendant FILE NUMBER(S) : SC 1864/05 L. Docker - Plaintiffs COUNSEL : V. Culkoff - Defendants Holman Webb - Plaintiffs SOLICITORS : Steven Klinger - Defendants LOWER COURT JURISDICTION : Ex tempore 1 The Plaintiffs seek the extension of a caveat lodged against the title to the First Defendant's land. A lapsing notice has been filed by the First Defendant. The circumstances in which the dispute arises may be very briefly described for the purposes of this application. 2 The Plaintiffs and the Defendants are neighbours. In about 2001 the Defendants began to construct a dwelling on their land. There were some episodes when the builders engaged by the Defendants came on to the land of the Plaintiffs without permission in the course of carrying out some building works. The Plaintiffs objected to what they alleged to be undue interference with their land. There were some discussions between the parties and there was some accommodation reached. 3 Later on the Defendants wished to lay some cabling to their land. It is alleged by the Plaintiffs that the Second Defendant as agent for the First Defendant, who is the registered proprietor, had discussions with Mr McKeand, the First Plaintiff, to see if some agreement could be reached whereby the builders of the Defendants would be able to gain more convenient access to the Defendants' land for the purpose of enabling that cabling work to be done. There was a suggestion at the time from the Second Defendant that at the same time that this cabling work was being done for the Defendants, the Plaintiffs themselves might like to use the trenches which were to be dug for the purpose of laying their own underground cabling to service their own property. The Plaintiffs say that they agreed to this proposition and that in consideration of allowing access to their land for the purpose of the builders performing work on the Defendants' land, they required an easement to be granted over that part of the Defendants' land which would contain the cabling which the Plaintiffs were going to lay to service their own property. 4 According to the Plaintiffs' evidence, this agreement was assented to by the Second Defendant on behalf of the First Defendant. Instructions were given by the Defendants to prepare the necessary survey plans for the easement to be granted. However, despite frequent reminders by Mr McKeand, the easement has not been granted. The Defendants now dispute that they ever agreed to grant an easement. 5 The Plaintiffs have lodged a caveat against the Defendants' land claiming an interest in that land pursuant to an oral agreement for the grant of an easement. They say that that agreement is specifically performable by reason of the fact that is has been fully performed by them. 6 The circumstances surrounding the lodgement of the caveat are as follows. The Plaintiffs commenced proceedings in the Court for a declaration that the alleged agreement was made and is specifically enforceable. The Defendants' solicitors offered an undertaking on behalf of the Defendants that there would be no dealing with the Defendants' land inconsistent with the alleged easement until the dispute could be resolved. However, despite that undertaking the caveat was lodged. 7 The Defendants, by their counsel, really make no submission that I should find at this stage of the proceedings that there is no arguable caveatable interest. If the evidence of Mr McKeand is accepted at the trial, then there would be, in my opinion, an arguable case for specific performance of the agreement for the creation of the easement. It seems to me that the Plaintiffs have established a sufficiently arguable case at this stage to warrant the finding that a caveatable interest has been demonstrated. 8 The real basis of the complaint by the Defendants is that the lodgement of the caveat was entirely unnecessary in view of the fact that they had given an undertaking through their solicitors not to deal with their land inconsistently with the interest claimed by the Plaintiffs. The Defendants say there is no evidence that they intend imminently to deal with their land and the lodgment of the caveat has caused them distress. 9 It is a pity that the dispute has not been confined to the issues defined in the proceedings commenced by the Plaintiffs and that a further skirmish has occurred on the question of this caveat. There is something to be said for the Defendants' proposition that in view of their undertaking, proffered through their solicitors, the lodgement of the caveat was unnecessary. The Plaintiffs say, however, that they should not be required to rely upon an undertaking inter partes to preserve their interests in the land. It is possible, so they say, that the First Defendant may deal adversely with the property in the absence of a caveat in such a way that a third party can take without notice and free of the claimed interest in the Defendants' land. 10 When extension of a caveat is sought the Court often takes into account the balance of convenience between extending the caveat and permitting it to lapse, even when a caveatable interest has been shown. Considerations somewhat similar to the grant of an interlocutory injunction come into play when what is sought is, in effect, a statutory order, rather than a court order, preventing somebody from dealing with an asset pending determination of a disputed claim against that asset by another party. Sometimes it is clear that the maintenance of the caveat causes unnecessary hardship to the registered proprietor, such as when the registered proprietor has entered into a contract to sell the land and the caveator seeks only to claim an interest in the proceeds of sale: Harvie v Stevens [2004] NSWSC 1217. When other means of protection of the caveator's interest are available, the Court will sometimes refuse to extend the caveat, much as it will refuse to grant an interlocutory injunction if there are other and less damaging means of preserving the status quo pending determination of the proceedings. 11 In this case, however, the Defendants show no hardship to themselves in the maintenance of the caveat pending resolution of the dispute. They say that they have no present intention of selling their land, but the caveat on their title is causing them irritation and annoyance at a personal level: their prejudice seems to amount to no more than that. 12 There is no evidence which suggests that the caveat has been lodged by the Plaintiffs to secure an improper or collateral purpose or to coerce the Defendants into doing something. The Plaintiffs simply say that they need the caveat maintained on the title to protect their interest against those who may take title to the land without notice. 13 It seems to me that there is no basis shown for holding that the lodgment of the caveat was improper in the circumstances, nor is there a case shown that the balance of convenience requires that the caveat not be extended. Accordingly, I propose to extend the caveat until further order, to abide the result of the proceedings which are presently on foot between the parties. 14 The Plaintiffs seek an order that the Defendants pay the costs of their application. The Defendants submit that costs should be reserved. 15 The discretionary considerations, I find, are finely balanced as to whether there should be a costs order now. It seems to me that the reasonableness of the Plaintiffs' conduct in lodging the caveat and the reasonableness of the Defendants' conduct in lodging the lapsing notice which has occasioned the present application ultimately depend on whether the alleged agreement for grant of the easement is established. Bearing in mind that the Defendants apparently have had a very limited time to prepare a response to this application, I think that the better course is to reserve the costs of this application. Costs will be reserved. ~ oOo ~ 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.