A caveat removed on the balance of convenience to permit refinancing.
Six Bruce Pty Ltd v Milatos and Ors  VSC 784, 19 December 2017, Keogh J.
The chronology was –
19 February 2016 Plaintiff becomes registered proprietor of a property using funds secured by registered first mortgage. It subsequently defaults under the mortgage.
20 May 2016 VCAT orders that a permit issue allowing construction of a four-storey apartment building on the property.
5 February 2017 Plaintiff contracts to sell the entire property to first defendant. Deposit paid.
20 March 2017 Purchaser nominates substitute purchaser.
3 July 2017 Settlement date extended to 4 August 2017 on the basis that purchaser pay an additional deposit which it (not the nominee) does.
31 July 2017 Purchaser learns of undisclosed drainage easement
affecting the property.
8 August 2017 Vendor serves rescission notice based on non-payment of balance of price.
14 August 2017 Purchaser services rescission notice based on alleged
non-disclosure of the easement in the vendor’s statement. Vendor retains
September 2017 Vendor enters joint venture agreement to develop the property.
3 October 2017 Purchaser caveats on ground of lien to secure repayment of money paid under the contract. Caveat does not name the nominee substitute purchaser. Two registered mortgages and two previous caveats exist. There is a subsequent caveat.
10 October 2017 Purchaser sues for return of deposit or declaration re caveat.
12 October 2017 Mortgagee sues vendor for repayment under mortgage.
20 November 2017 Vendor receives refinance offer from other lenders.
27 November 2017 Vendor files Defence to purchaser’s proceeding substantially disputing the claim.
The vendor commenced a proceeding under s. 90(3) to remove the purchaser’s caveat to permit refinance.
Keogh J removed the caveat subject to conditions. His Honour held –
1. There was a prima facie case that the caveator had the interest claimed. The prospects of the vendor being excused under the Sale of Land Act s. 32K(4) for breach of the law in the section 32 statement were entirely uncertain.
2. The caveat was not required to name the nominee. The effect of the nomination clause was to empower the purchaser to require the vendor to complete the contract by transfer of the property to the name of the nominee. After nomination the nominee did not acquire rights as purchaser.
3. However the balance of convenience favoured removal of the caveat because: most of the deposit had been released, presumably by agreement; the trial of the purchaser’s proceeding was distant; without the refinancing a mortgagee’s sale was likely; the vendor undertook not to deal with the property pending determination of the purchaser’s proceeding; the vendor agreed to charge the property to secure the amount of any judgment thus then enabling a further caveat; accordingly the purchaser’s position would probably be improved by the refinancing.