Bullfry and the ‘bootstrap caveat’

Bar News

Bullfry had started professional life as a draftsman … amending the schedule … a medical dictionary and a bromide by his side.

As usual, the matter was ‘urgent’! – why was it that solicitors often sat on a matter until the very last minute before seeking counsel’s advice? (But no matter the urgency, under the rules you could not appear via an AVL while driving your car, or watching the cricket.)1 Of course, a case may settle, and costs can be avoided. But, as a general rule, the early involvement of the junior Bar at least would result in a large cost-saving, given the relative ‘charge-out’ rates of a callow junior and her counterpart in a solicitor’s office.

Young Olivia, the floor’s latest reader, had rushed in to seek Bullfry’s counsel. Luckily, the latter had returned a little early from a salad lunch and was in the middle of perusing a poem of Horace before turning to reworking an outstanding advice. He rose with difficulty from the recamier – that early morning workout at the gym was proving a mixed blessing.

‘I’ve never had a caveat matter before, Jack – is there a good book on the topic?’

‘Well may you ask – when I was a boy there a very useful text by Shannon Lindsay that covered all the law in Australia and New Zealand. But it has never been updated. And Butt on Land Law came to an end in 2017 – that means that there is now some seven years of accumulated caselaw in “medium neutral” form which no-one has sought to synthesise or explicate! At best, you can probably find a “loose-leaf” service, or Google it! Or you can ask me – I have lost more caveat matters than most people have had breakfasts!

‘Now, you have to be careful with a caveat. As that master of equity, John Bryson, said Bullfry had started professional life as a draftsman … amending the schedule … a medical dictionary and a bromide by his side. years ago,2 “many shabby manoeuvres involving caveats come under the attention of judges of the Equity Division”. Lodging a caveat is like granting yourself an injunction without paying any filing fee or giving an undertaking as to damages. At a stroke you impede the registered proprietor from dealing with her property. What is the legal or equitable interest you are propounding3 – and a more fundamental question, who lodged4 the caveat?’

‘There was an informal loan to fund a home improvement! And we are allowed to lodge a caveat!’

‘Ah, a “bootstrap caveat”.’

‘What’s that?’

‘Where you pull yourself up by your own bootstraps! A caveat without a charging clause at all – so, you need to ask the court to find a security interest lurking in the bowels of the document, or transaction. Just lending money won’t get you there.5 And no written document with a charging clause6 in it? Can we “bootstrap” ourselves to safety, that is the question?’

‘I’ve never been too sure on charges – we didn’t have time in my property course at uni; the course only ran for 11 weeks and we didn’t get much beyond waiver of tort, usufructs, and possessory interests.’

‘The Court of Appeal provides an annual insight into the jurisprudence on the equitable charge. Every year or two there is a case which examines the topic minutely.7 The great thing about a charge is it is almost impossible in many cases to say how the matter will turn out much below the Court of Appeal – so you can negotiate from a position of strength. Never forget what Jessel MR said: “I may be wrong, I sometimes am, but I am never in doubt – except upon the proper construction of a written document”.’

As Bullfry looked at the proffered printout of the online caveat, a chill crept over him. Was a ‘handshake deal’, involving cash delivered in a coffee shop, sufficient to support a caveat, notwithstanding the licence to lodge one?

The drop box on the PEXA program seemingly only permitted a small number of choices to describe the basis of the ‘equitable proprietary interest’ which meant that a caveator often perforce failed properly to describe it. Clearly, a claim to be, say, the beneficiary of a constructive trust could not give rise to ‘an estate in fee simple’, or perchance be ‘described’ in less than ‘300 characters’. As Kunc J said elegantly at the time about the then manifest deficiencies of electronic filing: ‘In my respectful opinion, this appears to be an example of the technological tail waving the legal dog.’8

A more general thought crossed his meandering mind. Had this systemic use of the internet improved the provision of legal services? Bullfry had his doubts – just the other day he had considered a client’s bankruptcy notice, served by email, which asserted that many millions were owed but did not annex or have uploaded with it any relevant allocatur or other proof of judgment! An online search of the ‘new’ 2021 Bankruptcy Regulations failed to reveal any formal statutory requirement for a copy of the judgment to be served, but that had been clear law since Singtel.9 This sort of legislative lacuna made it very difficult to advise a client.

As well, much of the modern law could not easily be discovered. The High Court, allowing a recent appeal, noted that both the trial judge and the Court of Appeal had been unaware of the relevant regulation that applied,10 which meant that the conduct complained of could thus not be ‘misleading or deceptive’. (How was it, with all the resources available to the protagonists, that the matter had proceeded per incuriam to the Supreme Tribunal? And imagine the judicial gene if it had not been discovered before the High Court gave judgment? Could the court have recalled the matter of its own accord under some enlarged ‘slip rule’?)

Just why was the draftsman persistently adding to the length and complexity of legislation? That was a fundamental and unanswerable question. As a distinguished retiring jurist had recently pointed out:

The Bankruptcy Act has a schedule it in that is hundreds of sections long that adds to what was in the rest of that Act. Instead of having a standard like the 10 Commandments – thou shalt not steal – you’ve got 40 pages of how you might be able to steal.11

There was no obvious answer to this problem. Perhaps it was time to bring back a rigorous enforcement of Coode’s Rules. Bullfry had started professional life as a draftsman – the Antarctic Seals Ordinance (1979), and updating the amounts payable for every known procedure under the Medicare regulations had been part of his great legislative legacy – sitting alone, hungover, in his office in the old Admin Building near the Rose Garden next to Old Parliament House, a medical dictionary and a bromide by his side, amending 2,000 items in the schedule – ‘delete $4.50 and insert $5.00’; it had given him an unparalleled knowledge of medical terminology which, unwisely, he had never transmuted into a large Common Law practice!

‘Well, what’s the answer?’ said Olivia, wisely interrupting Bullfry’s somnolent reverie, which she feared might slip into his customary post-prandial ‘nap’.

‘It looks arguable to me,’ said our hero. ‘Reread White JA in Bellissimo v JCL Investments.12 And don’t forget it has been recently analysed in the Property List by Peden J in Nationwide Solutions Pty Ltd v FHT Nominees Pty Ltd.13 I have always found it a most sound forensic tactic to begin a submission with reference to the most recent disquisition on the topic by the judge hearing the matter, whether it be for or against you.’ BN


1 As Meek J recently observed in Wang v Yu [No 2] [2024] NSWSC 4: at [54]: ‘One might have thought it self-evident that it is not appropriate that anyone should even consider the possibility of attempting to appear by AVL whilst driving a car, let alone in fact appear in that manner.’

2 Cios Farming Estates Pty Ltd (Rec. & Man. App’td) v Easton & Anor [2001] NSWSC 525: at [74); (2002) 10 BPR 18, 845; (2002) NSWCA 389.

3 See per Ward CJ in Eq in NAB v Sayed [2020] NSWSC 1002: at [12]. So, a claim for damages does not support a caveat: see for example, Day v Munday [2019] NSWSC 452: at [18] (Kunc J).

4 See Lanciana v Alderuccio [2020] VSCA 352.

5 A mere unsecured loan does not give the creditor a caveatable interest: Mastronado v Remo West Ryde Pty Ltd [2024] NSWSC 8: at [22] (Meek J).

6 See generally Aitken, ‘The “slumbering” snark: aspects of the equitable charge – recent authority on security, enforcement and caveats’ (2018) 26(3) Australian Property Law Journal 299.

7 See for a recent example on the `bootstrap caveat’, Property Investors Alliance Pty Ltd v C88 Project Pty Ltd (in liq) [2023] NSWCA 291: at [89]–[105] (White JA).

8 Kunc J in Brose v Slade [2022] NSWSC 1785: at [76].

9 Curtis v Singtel Optus Pty Ltd [2014] 225 FCR 458 at [55]. For what is meant by ‘attached’ in an electronic form, see Mastronado v Commonwealth Bank of Australia [2019] FCAFC 127: at [8]–22]. For a recent application of the requirement to have the judgment attached, see Stewart J in Aquamore Credit Equity Pty Ltd v Maroon [No 2] [2024] FCA 14: at [20]–[32].

10 Mitsubishi Motors Australia Ltd v Begovic [2023] HCA 43: at [55].

11 ‘Why an SBF trial wouldn’t happen in “lamentably slow” Australia’, Australian Financial Review, 14 November 2023.

12 [2009] NSWSC 1479: at [11]–[18].

13 [2022] NSWSC 1479: at [23]–[27].

Jim Poulos KC

Bar News