KEENAN V BANKS
Supreme Court of the Northern Territory. Kearney J.
23 and 28 July 1987 at Darwin.

Real Property - application for summary removal of caveat - principles applicable - need for a clear case need for caveator diligently to assert the right claimed - whether amendment of caveat may be ordered.

Cases applied:
In re Stewart & Co; exp. Piripi Te Maari (No.2) 11 NZLR 745 Scott v Broadlands Finance Ltd (1972) NZLR 268
Plimmer Bros v St. Maur (1906) 26 NZLR 294 In re Peycher's Caveat (1954) NZLR 285
In re Thomson and Chipps; exp. Findlay (1886) NZLR 5 Elliott v Blanshard (1970) 17 FLR 7

Cases referred to:
George v Greater Adelaide Land Development Company Ltd (1929) 43 CLR 91

Statutes:
Real Property Act, s.191 Planning Act, s.83(2)

Counsel for applicant Solicitors for applicant

Counsel for respondent Solicitors for respondent

P.B. Bracher Morris Fletcher & Cross

P.J.B. Tiffin Loftus & Cameron

kea870149
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY OF AUSTRALIA
No.559 of 1982

IN THE MATTER OF the Real Property Act
AND IN THE
MATTER OF Caveat No.107787 BETWEEN:
MICHELLE KEENAN
Plaintiff

AND:
DOUGLAS JOHN BANKS and NESTA FRANCES BANKS
Defendants

CORAM:	Kearney J. In Chambers

REASONS FOR DECISION
(delivered 28 July 1987)

By Interlocutory Summons filed on 23 July 1987 the surviving defendant Nesta Banks (herein "the applicant") applies under s.191(IV) of the Real Property Act to have the Originating Summons herein of 24 November 1982 struck out, and to have Caveat No.107787 removed from Certificate of Title Volume 16 Folio 111. Most of the argument  was directed to the question of the removal of the caveat. I

indicated during the course of the hearing on 23 July that I was not satisfied that the Originating Summons should be struck out; that element of the relief sought is refused. I rule today on the question whether the caveat should be removed from the title.

Certificate of Title Volume 16 Folio 111 records that the defendants became registered in 1977 as proprietors of an estate in fee simple as joint tenants in Lot 7 Subdivision Plan L.T.O. 76/30. Lot 7, trapezoid in shape, comprises 8.10 hectares and has a frontage on the south to Pioneer Drive, Humpty Doo.

On 27 November 1981 the plaintiff caused Caveat No.107787 to be entered on the title, in the following terms:-

"TAKE NOTICE that I,	MICHELLE KEENAN	of
Block 7 Pioneer Drive, Humpty Doo in the Northern Territory of Australia, Taxi Driver claiming an estate or interest as equitable owner under and by virtue of a written agreement made on or about the 1st day of January, 1980 between DOUGLAS JOHN BANKS   and  NESTA FRANCES BANKS  of
Block 7 Pioneer Drive, Humpty Doo in the Northern Territory of Australia of the one part and myself of the other part whereby I agreed to buy a portion of the land situate in the Hundred of Strangways County of Palmerston being Lot 7 shown on the subdivision plan L.T.O. 76/30 formerly comprised in Land grant Volume 6 Folio 111 FORBID the registration of any dealing with the estate or interest of the  said   DOUGLAS JOHN BANKS   and NESTA FRANCES BANKS   in  the  said  land

unless such be subject mine).

dealing shall be expressed to to	my	claim." (underlining

As	appears	from	the	plaintiff's	affidavit	of
24 November 1982 the relevant part of the written agreement of 1 January 1980 upon which the plaintiff relied to claim her caveatable interest is as follows:

"[Illegible] SUB-DIVISION - Northern Half of Block 7 - Section 343 -
Hundreds of Strangways - between D.J. and
N.F. Banks, Vendors and
M. Keenan, Intended Vendee. 1st January, 1980.
Details of agreement will be -
M. Keenan will rent said sub-division	at
$100.00 per week.

One	month	rent	in immediately.

advance,	payable

Monies paid in rent will subtracted off total purchase price, which will be
$20,000.00 or $19,000.00, depending on Power needs.
Final settlement of purchase will be thirty (30) days on completion of Title Documents."

It is clear that this was a "bush" agreement, one	drawn	up without benefit of legal assistance.

The caveat was lodged pursuant to s.191 of the Real Property Act, the relevant provisions of which are:-

any person claiming to be interested
... in equity, whether under an agreement
... may lodge a caveat ... forbidding the registration of any dealing with such land ... unless such dealing shall be expressed to be subject to the claim of the caveator ..•".

The plaintiff's Originating Summons of 24 November 1982 sought first a declaration that the plaintiff was "the purchaser of part of Block 7" and, second, an order under s.192(VII) of the Real Property Act directing that the time of registration of caveat No.107787 be extended indefinitely.   The  second  order  was  made  by consent on
25 November 1982, both parties being given liberty to apply. Thereafter no steps in the suit were taken by either party for nearly 5 years. Douglas Banks died in 1985. On 16 June 1987 the applicant deposed that she desired to enter into "certain commercial arrangements" in respect of Lot 7, but was unable to do so because of the caveat. On 23 June 1987 the plaintiff deposed to attempts "made to settle this matter out of Court", and sought that the caveat remain in place pending the trial of this action and thus, presumably, the resolution of the question whether she should be granted
the declaration sought in November 1982.	On	20 July	1987
the applicant deposed that the agreement of 1 January 1980 had been drawn up by her late husband Douglas Banks, and continued -

"7. Shortly after the creation of the [agreement] the Plaintiff erected on the property a demountable two bedroom dwelling together with a shed and a water tank. The Plaintiff resided irregularly on the property for a short time. In mid 1983 a bushfire resulted in the total destruction of the demountable dwelling and there now remains on the property a tin shed enclosed on two sides only and a water tank and a number of old car bodies."

The applicant estimated the present value of Lot 7 at	about
$135,000; she sought to raise $40,000 to establish a business on the land, but the Bank would lend the money only if the caveat was removed.

Mr Bracher, counsel for the applicant, submitted that the agreement of 1 January 1980 is in form not an agreement for the sale of land, but an agreement to rent part of Lot 7, coupled with an intent that part be purchased in the future; further the portion of the land to be sold is insufficiently described therein, the price is not sufficiently certain, and the "sale" relates only to a proposed subdivision. As to this submission, I  consider that it is clearly arguable that the agreement of 1 January 1980 is a contract for the sale of the "northern half" of Lot 7, as well as an agreement for its occupation as tenant pending settlement. There appears to me to be, arguably, sufficient particularity in the agreement as to parties, price and land; the fact that the necessary subdivision was

,;;,

at that time only proposed does not necessarily affect matters, subject to consideration of an argument based on the Planning Act.

Upon this application under s.191(IV) the Court "may ... make such order in the premises ... as shall seem just".

Mr Bracher conceded that an order for the summary removal of a caveat should not be made except in a clear case, the principles applicable being akin to those which apply on an application by a defendant for summary judgment under Order 17 Rule 1 of the Rules of Court. The concession was properly made. A caveat will not be ordered to be summarily  removed  unless  the  Court is satisfied that the
caveator will not be able to make out a case for relief; see In re Stewart & Co; exp. Piripi Te Maari (No.2) (1892) 11 NZLR 745 and Scott v Broadlands Finance Ltd (1972) NZLR 268. The fullest possible opportunity should be given for the matter to be fully litigated; see Plimmer Eros v St. Maur
(1906) 26 NZLR 294 per Stout C.J. (at p.296):-

the caveat cannot be set aside unless the claim to the estate appears to be without any validity. If there is a reasonable question to argue the court should not remove the caveat, but permit the matter to be litigated." (underlining
mine).

I do not consider that it is clear that there was no valid ground for lodging the caveat in 1981, or that the interest which arguably justified that lodging, no longer exists; on that basis, the caveat should not be summarily removed - see In re Peycher's Caveat (1954) NZLR 285.

However, as Mr Bracher pointed out, a caveator must proceed with reasonable diligence to assert the right claimed, or the caveat may be summarily removed; see In re Thomson and Chipps; exp. Findlay (1886) NZLR 5 S.C. 52. The applicant submits that the plaintiff has not proceeded with reasonable diligence. In this connection, as noted earlier, nothing was done by the plaintiff for nearly 5 years, apart from the early application, granted by consent, to extend the time of the caveat indefinitely. On 23 July 1987 the plaintiff instituted proceedings No.475 of 1987 against the applicant as First Defendant and 2 others seeking an order that the defendants transfer to the plaintiff -

"all their right title and interest in and to certain land being the northern half of Lot 7, Section 343 ... being specific performance of a contract entered into between the plaintiff as purchaser and the First Defendant and Douglas John Banks (now deceased) as vendors AND for damages."

With considerable hesitation, I consider that the caveat should not presently be removed, upon the grounds of the plaintiff's failure to proceed thus far with reasonable diligence.   It  appears  from  the plaintiff's affidavit of
21 July 1987 that a considerable amount of correspondence has  taken  place  between the respective solicitors between
17 December 1981 and 12 May 1987; the plaintiff contends in para. 3 of her affidavit that "most of these letters related to attempts to resolve the matters in dispute 'out of Court'".

Mr Bracher	also	submits	that	the	agreement	of
1 January 1980 is void because of the operation of s.83(2) of the Planning Act which provides that -

"A transaction purporting to subdivide land in contravention of this Part is void. 11

It appears to be common ground that Lot 7 has not been subdivided in accordance with the Planning Act; according to the applicant, an application to subdivide Lot 7 was approved subject to certain conditions which were never fulfilled. It is, however, not clear to me that the agreement of 1 September 1980 is a "transaction purporting to subdivide land". Further, there is an insufficient factual basis at the moment to deal with any submission under the Planning Act. Accordingly, it is unnecessary to

consider the effect o	authorities such as	George v Greater Adelaide Land Development Company Ltd (1929) 43 CLR 91.

The applicant submits, in the alternative, that the caveat should be amended. It appears that the Court has power to do so, in a proper case; see Elliott v Blanshard (1970) 17 FLR 7. The power stems from the wide  provisions of s.19l(IV) of the Real Property Act. However, this does not appear to be a case where the question of an amendment of the caveat arises; it appears to be clear enough in its terms, which refer to the agreement of 1 January 1980, and the reference to the "northern half" of Lot 7 in the agreement is sufficiently specific, bearing in mind the shape of the block.

Mr Tiffin has pointed out that the plaintiff's contention in para. 3 of her affidavit of 24 November 1982, that she had paid the defendant $8,000.00 "towards the purchase price", the defendants having at the time "applied for consent to subdivide the said land", has never been specifically denied.

In the result I refuse at this time to order that Caveat No.107787 be removed from Certificate of  Title Volume 16 Folio 111. It is however necessary that the plaintiff's claim in relation to the northern half of Lot 7 be proceeded with as expeditiously as possible. I direct

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that the hearing of the plaintiff's claims in proceedings No.559 of 1982 and 475 of 1987 be given priority and that the parties attend before the Deputy Master within 14 days on a Summons for Directions to ensure that these proceedings are brought to a hearing as soon as possible. In the event that they are not brought to a hearing within 5 months from today, the applicant is at liberty to renew her application. The costs of this application which is certified fit for Counsel under Order 64 Rule 39, are reserved, and should be dealt with following the hearing.