Secure Funding Pty Ltd v Michell in his capacity as trustee of Jeremy Rowell & Ors, [2026] VSC 398, Gorton J.

This case concerns a contest under the Transfer of Land Act s. 90(3) between caveators and a registered mortgagee.  It is interesting because Gorton J. states the criteria for maintenance of the caveats in terms similar to those for an application for an injunction, in particular in stressing whether damages are an adequate remedy.   Although the relationship between injunctions and caveats is close (eg a caveat has been called “a statutory injunction”: Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 at 228 quoted in Nicholas Olandezos v Bhatha & Ors [2017] VSC 234 at [23]) courts generally state the caveat test in a fashion more distinct from the test for obtaining an injunction (eg Nicholas Olandezos at [16]-[18] per Derham AsJ, quoting Sylina v Solanki [2014] VSC 2 at [43] per Elliott J.; Chan & Anor v Liu & Anor [2020] VSCA 28 at [42], [43], [75], [76]).

Further, his Honour states that the caveator was obliged to establish a serious issue to be tried of the caveator having the interest in land claimed, and in so doing appears to prefer this test to that of the caveator having to establish a prima facie case with sufficient likelihood of success to justify the maintenance of the caveat and the preservation of the status quo pending trial (espoused for example in Nicholas Olandezos at [17] and footnote 27 and the cases cited therein).

 The facts were –

• Torbeckin Pty Ltd (Torbeckin) was the registered proprietor of land. In 2021 it borrowed monies from the plaintiff secured by a mortgage subsequently registered as a first mortgage.  The second defendant (Rowell) was a director of Torbeckin from May 2022 to October 2025.   The third defendant (Domino) was a current director of Torbeckin.
• Torbeckin defaulted in making mortgage repayments and in 2023 went into liquidation.
• On 3 October 2024 Rowell caveated the property on the grounds of an implied, resulting or constructive trust. Later that month he was bankrupted.
• In April 2026 the plaintiff, pursuant to its powers as mortgagee, entered into a contract of sale of the property, initially due to settle on 18 June.
• In May 2026 Domino caveated over the property claiming an interest as chargee on the ground of “exoneration”.
• The plaintiff applied under the Transfer of Land Act s. 90(3) for removal of the caveats. It also sought orders restraining the caveators from lodging further caveats.

Gorton J. ordered that the caveats be removed and that the caveators be restrained from caveating further, holding –

1. On the hearing of an application under s. 90(3) a caveator was obliged to justify the retention of the caveat as if the caveator was applying for an interlocutory injunction to prevent the registration of the transfer in question. Accordingly the caveator was obliged to establish a serious issue to be tried of having the interest in land claimed which took priority over the interests of the registered mortgagee, and that the balance of convenience favoured the maintenance of the caveat.  In reality, the two tests converged: was there a sufficient likelihood of success in establishing an interest in the property to justify in the circumstances the preservation of the status quo pending trial?   Whether it be a separate test, or part of the assessment of the balance of convenience, the question as to whether damages would be an adequate remedy was also a relevant consideration. [12], [13], [37], [43]

2. Rowell’s caveat would be removed because:

• • there was no real prospect of him establishing that he had an equitable interest in the property rather than merely being a creditor of Torbeckin; [29(a)], [33]
  • if he did have this interest there was no real prospect of it being prior to the plaintiff’s interest. To gain priority he must establish, at the very least, that the registered mortgagee had notice of his equitable interest before registration so that some in personam right could be asserted against it; [29(b)], [38], [39], [42]
  • if Rowell had established (a) and (b) that interest now vested in his trustee in bankruptcy, and so he had no real prospect of obtaining an injunction to restrain registration of the transfer on the ground that this registration would result in him losing his interest, because this registration would not affect an interest held by him. (However, as to standing, it was arguable that the implications of bankruptcy may well affect whether a bankrupt could succeed in resisting the application, rather than whether a bankrupt could respond to the application.  It might, theoretically, be possible, for example, that a supposedly-bankrupt caveator might seek to establish the fact of not being bankrupt, or that the interest claimed had not vested in the trustee or was exempt property); [16], [19], [20], ]23], [29(c)], [43]
  • His Honour was not satisfied that damages would not be an adequate remedy to any claim by the caveator against the plaintiff; [29(d)], [46]
  • the balance of convenience favoured it because of: the lack of a strong case that the he had proprietary interest prior to that of the plaintiff; Rowell’s bankruptcy; and the likely ability of the plaintiff to meet any damages ordered. [29(e)], [52]

3. A guarantor who discharged a principal’s debt had a right that might be called a right of “exoneration” from the principal, but that only created a right to reimbursement for the moneys paid and not an interest in the principal’s property, let alone one with priority over a registered mortgage. [32]

4. Domino’s caveat would be removed for the same reasons as those contained in paragraphs 2(a), (b), (d) and (e) above. [29(a)], [29(b)], [29(d)], [29(e)], [33], [38], [39], [42], [46]

5. The fact that another caveator had withdrawn that caveat pursuant to a private arrangement, or that no application had been made to remove other caveats, was irrelevant. [25]-[27]

6. The source of the power to restrain lodgment of further caveats was found both in the Supreme Court Act 1986 s. 37 and in the Transfer of Land Act 1958 s. 90(3). [11]

7. There was a real risk that, unless restrained, the caveators would lodge or seek to lodge further caveats to forestall settlement of the sale. The making of an injunction would cause no hardship, or no unacceptable hardship, to them and accordingly, the plaintiff having given the undertaking as to damages, they would be enjoined from lodging any caveats, or causing anyone else to lodge any caveats, over the property pending registration of the transfer. [54]-[56], [57(c)]

Philip H. Barton

Owen Dixon Chambers West

Thursday, November 5, 2026

Ngo v Thai [2026] VSC 376, Ierodiaconou AsJ.

The facts were –

• In 2020 the plaintiff (Ngo), who was the registered proprietor of a property, and the defendant (Thai) executed a Design Contract whereby Thai was to prepare plans and drawings for its redevelopment. They subsequently executed a Building Contract.
• In 2023 Thai commenced a VCAT proceeding for breach of the Building Contract. Ngo counterclaimed.
• In 2025 Thai issued a second VCAT proceeding, but evidence was led that neither Ngo or his solicitors were aware of this proceeding and service of it was not proved.
• On 20 June 2025 Thai caveated over the property based on a purported outstanding invoice arising pursuant to the Design Contract (also the subject to the second VCAT proceeding). He did not until after the caveat’s removal inform Ngo’s solicitors that its basis was the second VCAT proceeding (as cls. 10 and 11 of the Design Contract authorised lodgement of a caveat as security for any monies payable under that contract) or to correct their assertions that it was based on the first VCAT proceeding.
• Following letters in August and November 2025 demanding removal of the caveat a proceeding for its removal under the Transfer of Land Act s. 90(3) was commenced on 30 January 2026 returnable on 10 February. Thai was emailed the initiating documents on 3 February, was texted by Ngo’s solicitors on 4 February and was personally served on 5 February.  That day after close of business he emailed that he was in the process of withdrawing the caveat which he did next day.   Ngo’s solicitors replied that indemnity costs would be sought and on the day of the hearing served Ngo’s affidavit in support of the Summons, sworn on 4 December 2025.

Ierodiaconou AsJ ordered that Thai pay Ngo’s costs of the proceeding on a standard basis, holding –

1. The general rule was that costs should follow the event. Absent disqualifying conduct, the successful party should recover its costs even where not succeeding on all heads of claim. However the Rules of Court permitted significant flexibility in determining costs and accordingly in this determination the Court would do substantial justice between the parties.  Costs were usually awarded on a party/party basis [Note: now standard basis] but in special or unusual circumstances would be awarded on a solicitor/client or indemnity basis. [41], [42]
2. Although, strictly speaking, Ngo had not discontinued the proceeding, it was useful to apply the principles on discontinuance by analogy, as he had obtained caveat removal without requiring judicial adjudication. Where a proceeding was discontinued: it was usually impracticable to assess who would have won the case; a distinction existed between cases in which one party, after litigating for some time, effectively surrendered, and cases where some supervening event, or settlement, so removed, or modified, the subject of the dispute that, although it could not be said that one side had simply won, no issue remained except that of costs.  In the former type of case it was common to award costs to the successful party.  In the latter there may be difficulty discerning where costs should be borne. [43], [44]
3. Thai would be ordered to pay Ngo’s costs because: Ngo was successful; Thai had capitulated; Thai’s ignorance of his possible costs liability no excuse; Thai had been on notice of the proceeding since November 2025; whether the caveat would actually have been removed on a contested hearing was irrelevant; there was no basis to award Thai costs. [46]-[51], [54]
4. Under Rules 63.28 and 63.20 of Supreme Court (General Civil Procedure) Rules the Court had a discretion to award costs other than on the standard basis. Special circumstances were required before it would award indemnity costs, being:

• • making an allegation, known to be false, of fraud;
  • making an irrelevant allegation of fraud;
  • conduct causing loss of time to the Court and to other parties;
  • commencement or continuation of proceedings for an ulterior motive;
  • contempt of court;
  • commencement or continuation of proceedings in wilful disregard of known facts or clearly established law;
  • failure until after the commencement of the trial, and without explanation, to discover documents the timely discovery of which would have considerably shortened, and very possibly avoided the trial.

Further, under the Civil Procedure Act 2010 s. 28(1), in exercising its discretion as to costs a court may take into account any contravention of the overarching obligations (ie those found in ss. 18, 19, 24 and 28). [60], [63]

5. Costs would not be awarded on an indemnity basis, because:

• • no special circumstances existed, nor had Thai engaged in unmeritorious or deliberate improper conduct;
  • once served Thai did not fail to use reasonable endeavours to ensure that costs were reasonable and proportionate to the issues in dispute;
  • Ngo’s solicitors did not do a Titles Office search to ascertain the ground of the caveat. If they had so done it would likely have been evident that it was based on Thai’s claim in the second VCAT proceeding.  Armed with that information, the communications with Thai may have been more fruitful;
  • although Ngo’s solicitors informed Thai on 6 February, shortly after the caveat was removed, that Ngo would seek indemnity costs, no costs submissions were served, costs submissions were delayed until the morning of hearing, and then without proper explanation Ngo served an affidavit in support of the caveat removal. [66], [68]

6. There was no basis for a gross sum costs order under Rule 63.07(2)(c). [69], [70]

Philip H. Barton

Owen Dixon Chambers West

Tuesday, October 27, 2026