Leros Pty Ltd v Terara Pty Ltd

[1991] HCATrans 206

~ ~~

,,

-~~

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No Pl2 of 1991

B e t w e e n -

LEROS PTY LTD

Applicant

and

TERARA PTY LTD

First Respondent

NATIONAL AUSTRALIA BANK

Second Respondent

Application for special

leave to appeal

MASON CJ
DEANE J

McHUGH J

Leros 1 8/8/91

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO CANBERRA

ON THURSDAY,· 8 AUGUST 1991, AT 4.02 PM

Copyright in the High Court of Australia

MR C.J.L. PULLIN, QC:  May it please the Court, I appear

with MR D.J. McEVOY, for the applicant. (instructed

by Tolson & Co)

MR J. COURTIS: I appear for the first respondent.

(instructed by Claudio Shaw)

MR E.M. HEENAN, QC:  I appear with MR B.S DODD for the econd

srespondent. (instructed by Mallesons Stephen

Jaques)

MASON CJ: Yes.

MR PULLIN:  Your Honours, contrary to the last matter, this

raises rather more complex questions concerning the

Torrens system and we say exposes certain heresy,

which should be dealt with at a very early stage,

lest it cause some problems with the Torrens system
throughout Australia. Could I just ask about

supplementary documents. There have been sent

across to Your Honours a supplementary affidavit of

Mr McEvoy, which should be separate.	Does the
Court have that document?

MASON CJ: Yes, we have that.

MR PULLIN:  Copy of an unreported decision Kuper, which was

sent across by fax only last night?

MASON CJ: Yes, we have that also.

MR PULLIN:  And a copy of the contract and conditions that

was entered into by the applicant when it bought

the land.

MASON CJ: Yes.

MR PULLIN:  The facts are rather complex, but in fact boil

down to a quite simple set of facts and I wonder if

I could just summarize them - it will not take me

very long.

MASON CJ: Yes.
MR PULLIN:	The applicant's predecessor in title granted a

lease to one of the first respondents, that is

Terara's predecessors in title. Terara's

pra~ecessor then assigned the lease to - - -

MASON CJ:  Mr Pullin, we are familiar witn the facts and the

chronology in relation to the instruments and the

caveats.

MR PULLIN: Yes. I do not intend going through the facts in

any great detail, but just to identify the

important aspects in relation to those facts.

Leros	2	8/8/91
MASON CJ: Yes.

MR PULLIN:  It will not take me long, Your Honours. What we

are concerned with here is not the short-term

lease, and it is important that I stress that early

on, because short-term leases are protected by a

variety of means under all the Torrens statutes.

The case concerns the option which would take

effect as an option to renew for seven years, after

the present term expires. Section 68 of our

Transfer of Land Act is the main indefeasibility

section, in our Act, and like all the

indefeasibility sections, it provides that the

registered proprietor is free of all encumbrances

whatsoever and then there are a list of exceptions

- fraud being one of the exceptions - and

relevantly, except a lease to a tenant in

possession, for a term not exceeding five years.

If the section ended there the position would

be that the lease and its option would probably be

protected. The reason that I say that is because

in the Mercantile Credits case, a decision of this

Court, it was held that an option is an incident of

a lease, so would be protected if the lease was a

lease which was under five years and did not have

to be registered. So one can see the reasoning:

indefeasible title except for leases short term -
and this was a short-term lease under five years -

and, on Mercantile Credits, the option is an

incident of the lease. But the section goes on to

say, to reverse that position, to add in the last

few lines, in section 68, and this is reading from

the fifth-last line:

but no option of purchase or renewal in any

such lease or agreement shall be valid as

against the subsequent registered interest

unless such lease or agreement is registered

or protected by caveat.

So you can gain protection one of two ways:

registration or protection by caveat.

Now, Terara's predecessor, and more Terara,

registered the lease so there is no question of

that protection having been afforded Terara.	Or
wh~n the original granter of the lease, the

University of Western Australia, was the registered proprietor, did it lodge a caveat? Then the university sold to another company. In fact there

were two companies - I need not go through all

those facts. Each time those companies purchased

under a contract and became registered proprietor -

and we say there can be no question that they took the land free of encumbrances whatsoever including free of the option because the lease, while

Leros 8/8/91

protected - that is, the original term was

protected - the option itself was not protected

because that is exactly what the section says.

Then, down this chain, our predecessor in

title sold to us and sold to us free of

encumbrances. The contract of sale was free of

encumbrances. When it came time for settlement the evidence revealed that the caveat was going to stay

in position - I have forgotten one fact, and the

critical fact - that is that Terara, when our

predecessor in title was the registered proprietor,

decided belatedly that it should lodge its caveat
and did lodge a caveat referring to the lease and

to the option and then said, "Well, look, we have a

caveat lodged and therefore we satisfy those last

five lines of section 68, so therefore you take

subject to the option." And we said, "But we have

taken and will take our title from a registered

proprietor who took free of that encumbrance."

Now, just before settlement there was some

complaint by us about the existence of the caveat

and the fact that we took free of encumbrances.	We
settled because we had received a default notice.
So we resisted all along and it was not a term of
our contract.

I mention all of that because I notice in my

learned friend's outline of submissions that there
is some suggestion that the judgment could be

supported on the principles in Bahr v Nicolay

which, you may remember, there was a contract of

sale which involved an agreement by the successor

in title to take subject to the interest in that

case.

Now, equity, of course ..... and through various

means said that there was either an express trust

or, I think, a constructive trust. Now, none of

that applies in this case, this is not a case for

the application of Bahr v Nicolay.

Now, I just mention the caveat which was

lodged by Terara.	It lodged what is called the
caveat which can be lodged under section 137 of the	subject to claim caveat. There are three types of present purposes are a caveat absolutely forbidding
any dealing with the land whatsoever or,
alternatively, a caveat which is called the subject
to claim caveat, and the clear effect of such a caveat is that I can lodge a caveat, someone else can become the registered proprietor, but they take
knowing that whatever interest could have been
established against my predecessor - registered
proprietor - will stand as against me. And so what

Leros 8/8/91

was done was, there was a lodgment of a subject to

claim caveat, but we say as at that time, as
against Western Acquisition which was our

predecessor in title, the caveat could not have

been sustained because there was no interest which

stood - not an option interest which stood. So

they are the relevant facts so far as the first

respondent's caveat is concerned.

Now, the bank had been partially attentive to

its interests because after Terara became the

lessee it wanted to borrow some money and did

borrow money from the National Bank, and the

National Bank took - - -

MASON CJ:  We are familiar with the circumstances in which

the National Bank lodged its caveat, relying on the

lease.

MR PULLIN: Yes. But it is important that I just make this

point, and I have nearly finished the reference to the facts, Your Honours, that is that the interest

the bank took was a sub-demise. It did not take an assignment of the whole term, it took a mortgage by

way of sub-demise for a lesser period of time - one

day less - so that it was an interest carved out of

and dependent upon the head lease.

The caveat that it lodged read "mortgagee of leasehold by way of sub-demise", they are the

words, there was a slight spelling error.

MASON CJ:  Was there not annexed to the caveat the documents on which the bank's interest was based?

MR PULLIN: There was indeed, Your Honour, but the claimed

interest was limited to "mortgagee of leasehold by

way of sub-demise".

Now, I know this raises a point that was

seized upon by the Full Court and the Full Court

reached the conclusion there was notice, if one

looked at the caveat and then looked at the ·

documents associated with it, and that would have

alerted any purchaser to the fact that there was an

option. But can I refer to section 137 of the

Transfer of Land Act which the Court would have.

Section 137, in about the seventh line,

indicate that a person:

may lodge a caveat with the Registrar in the

form of the Eighteenth Schedule hereto or as
near thereto as circumstances will permit

forbidding the registration of any

person ..•.. either absolutely or until after

notice ..... or subject to claim.

Leros 8/8/91

Now, it is important then to look at

schedule 18 - and I would take the Court to that -

which is on page 163 at the back of the volume.

You will see the form of the caveat there and under

the three boxes you will see, in very small print,

on the left-hand side:

Specify the estate or interest claimed.

And the caveator claims an estate or interest, and

then it is set out.

Now, in the Kuper case, which we sent over

last night, the Full Court of this Court has

observed that that requires the specification of

the estate or interest in accordance with that

side-note, and I will just give a reference to

that. It is on page 18, His Honour the Chief

Justice's judgment. So there can be no argument

that the law is, in this State, that the

requirement is that there be a specification of the

estate or interest.

From the papers, the Court will be aware that

there is an 87-year-old line of authority which

stands in New South Wales and which has been

referred to in other cases. In fact even in

Kuper's case there is a passing reference to one of

that long line of authority, to the effect that

precision is required in relation to the

delineation of the interest claimed. The reason

for that is said to be that there has to be

certainty about exactly what the claim is that is

being made.

MASON CJ:  To what extent was this point argued before the

Full Court?

MR PULLIN: Your Honour, the position is that Kerabee Park,

which is on the list of authorities, and also

referred to in Mr McEvoy's affidavit when he sets

out all of the relevant judgments, was on our list
of authorities and was on our list of submissions.

Kerabee Park refers to the Court of Appeal in New

South Wales in Vandyke, which very sternly told a

judge at first instance that he should follow this

long line of authority, and not depart from it

beqause of its antiquity. That was on the list of

authorities. We made a submission in our

supplementary list of authorities that precision

was required.

Because of the way the case was developing,

nobody seemed to be arguing that point at the
hearing, so we simply left that aspect and said

that in view of the fact that it did not seem to be

being argued against us, that there was not

Leros 6 8/8/91

precision in relation to this caveat, there was

really no need to develop it.	So it was not
developed.	And then, of course, out comes the

judgment, which really results in a decision

completely contrary to this long line of

authorities.

It must not be thought that the court is not

aware of this long line of authorities, and I do

refer to Kuper's case where His Honour

the Chief Justice is quite clearly aware of it, and

can I just refer to page 26 of the judgment. At

the bottom of page 26 His Honour said, and this is

agreed to by Mr Justice Pidgeon, the last three

lines:

A caveat which does not comply with the

statutory requirements may be void and of no

effect. In Palmer v Wiley, Pring J. said:

"The registered proprietor is entitled to

treat the caveat as waste paper if it does not

comply with the Act."

Now, Palmer v Wiley and Mr Justice Pring's judgment

is the second in the 87 year-old line of

authorities which has been referred to on many

occasions, and I have listed all the times that it

rates a mention.

So the Full Court is well aware of it, and I

would be hopeful that we did not lose our

application because it was suggested that this

argument had not been appreciated or understood.

The Full Court is clearly aware of it, and there

was a supplementary submission made to the court so

that the court was made aware of this line of

authorities in this case. But the way the case was

developing was that all the attention was

originally directed to the caveat of the first

respondent.

The bank then came in, and we presented the

argument on the basis that the bank really rode

upon the interest of the first respondent because
it is merely a subsidiary interest. In fact,

Their Honours then seized upon the bank's caveat

anq said that was what gave efficacy to the caveat

by the first respondent. It is a matter about

which we complain, with respect, somewhat bitterly.

But the issues are there. It does not affect the

legal issues. The definition of the interest in

this case simply does not refer to the auction.

The Act actually requires a specification of the

interest, and that interest was not protected.

Leros 8/8/91

Now, can we just go to what was the reasoning of the court, and we would say it is demonstrably

fallacious reasoning. I would like to go to the

Chief Justice's judgment first concerning the first

respondent's caveat; that is, the one that was

late, went on after there had been two changes of

registered proprietor. At page 43, under the

heading of "First Respondent's Caveat", His Honour

refers to a number of cases and then said a number

of these cases were referred to in Coles KMA Ltd v

Sword Nominees Pty Ltd, and distinguished on the

ground that in that case a caveat had been lodged

before the relevant party had become registered.

MASON CJ:  Mr Pullin, we think at this stage we might be

assisted by calling on the respondents. Of course

you will be able to respond to anything that they

say in reply.

MR PULLIN: If it please the Court.

MR COURTIS:  If Your Honours please, on behalf of the first

respondent, it is our submission that, although it might be seen that the appeal raises a question of public importance, we submit it is not of general

importance, because other States have different

Acts in different contexts and it is my understand

that it is only South Australia and the

Northern Territory that have legislation in

somewhat similar form. In any event, it is our

submission that the majority of the Full Court came

to the correct conclusion on the law and that,

simply put, is that the plain meaning of the last
five lines of section 68 of the Act was given

effect by the actions of the first respondent.

McHUGH J:  Mr Courtis, if that argument is correct, it would

follow, would it not, that your client could have

lodged the caveat after the applicant became the

purchaser of the land?

MR COURTIS: Will respect sir, we would say to that, that

that would be a clear case where the caveat would

not have the requisite or required effect.

McHUGH J:  Why is that?

MR COURTIS:_ Well, it is precisely because our caveat was on

before the applicant became registered proprietor

that it had the precise effect intended by the

statute. Just to go to the facts, my friend

Mr Pullin quite correctly stated that we put on our

caveat prior to the applicant contracting to
purchase the freehold. In fact, on the transfer of

land document that the applicant then lodged after

settlement, our caveat was noted as an encumbrance,

together with the caveat of the bank. So, at the

Leros 8 8/8/91

very point when the applicant lodges his transfer

at the Titles Office for registration, he does so

expressly subject to the caveat of both the first

and second respondent.

It is our submission that that is precisely the situation that section 68 speaks to when it

talks about the protection of an option by a caveat

against a subsequent registered interest. It is

our submission that that is precisely the point.

The applicant took a subsequent registered

interest, that is subsequent to our lodging of our

caveat. And that is the short point, with respect,

as to what this appeal is all about.

McHUGH J:  What is the transfer provision in the Act that

talks about registration of transfers? Which

section of the Transfer of Lands Act?

MR COURTIS: Sorry, Your Honours. I look to my learned

friends to assist me there.	I do not have that
provision.

As far as section 68 is concerned - section

82, I am told, if Your Honours please. It is our

submission that section 68, however, is the primary

section because that is where we say the question

of indefeasibility comes in. It is the section to

which we have to look for the facts of this case.

Put as succinctly as I can put it for the first

respondent, it is the fact of the registration of

the caveat that is what is important.

If I can paraphrase another case, it is title

by registration, not registration of title. I know

that we are not talking specifically about

registration of title in the sense of the transfer,

but the principle is what is at stake and the
principle is analogous; that is, it is the fact of

the lodging of the caveat prior to the applicant
taking title that is what section 68 is about, and

that fact having been effected and that fact being	proved, if you like, by the fact that the caveat is
noted on the transfer, the very document which the
applicant has to lodge at the Titles Office in
order to take title, that is what we say brings us within section 68 and hence we say, with respect,
the_ Full Court got it right.

To say otherwise, which of course is what my

learned friend, Mr Pullin, seeks to argue, is to

put such a strained construction upon section 68 as

to go against the very principle of

indefeasibility. With respect, if my friend is

right, then indefeasibility is defeated, which goes

against the legislative purpose of the Act.

Leros 8/8/91
The short point is, the fact of us putting the

caveat on, that is, putting it on prior to the
applicant taking title, the applicant taking title
expressly with our caveat noted on his transfer of
land document, we say is what brings section 68

into play and the Full Court having got it right.

May I also make brief mention of the High

Court decision in Pacific Dunlop v Paul Hogan and

others. In that case the judges of the Full

Federal Court below gave three widely different

judgments and it was very difficult to find what

was the ratio decidendi of that case.

Nevertheless, special leave was refused and if I

can just quote, and I have put that quote on my

written submissions, from that case:

on the assumption that this case raises a question of general principle, we are not

persuaded that the experience of intermediate

courts of appeal with cases of this kind has

developed the law to the point where it would

be appropriate for this court to deal with the

question.

We would submit, with respect, that our

position is better than the position in

Pacific Dunlop. We would submit that there is in

fact a strong judgment from the majority of the

Full Court. It is an authoritative judgment.

Indeed, it is the. only judgment in relation to this

point so that there is no confusion as to the law;

certainly, in Western Australia. I cannot in my

research find any other similar case or analogous

case in any other State of Australia.	Maybe there
is, but I simply cannot find it.

But on the assumption that this is the only case on this fact situation, then under the

principle of Pacific Dunlop at the very very least

what ought to happen is that the point should be

allowed to emerge through perhaps other courts in

Australia; certainly through the Supreme Court of have the ability to develop the law and ultimately

give this Court the ability, perhaps, to ultimately

declare the law with finality.

MASON CJ:  But you can hardly apply the principle of Pacific

Dunlop in this case. In Pacific Dunlop you are

dealing with, really, the law as it emerges in a

completely new area, that is, in relation to

character merchandise.

Leros 10 8/8/91

MR COURTIS: Yes, I concede that point, sir, but we would

still make the point that the case here is the

authoritative definition of the law for

Western Australia.	We would submit that there is
no obvious conflict in the law on the point.	we

simply say that the Full Court has got it right and

it is in - - -

DEANE J:  If your caveat had spelt out accurately your

client's interests against the then registered

proprietor, what would it have said in relation to

the options?

MR COURTIS: Yes, may I take Your Honours to page 91. I

apologize, that is the bank's caveat.

DEANE J:  No, I was not referring to what it says.

MR COURTIS: Sorry.

DEANE J: What I was obliquely suggesting to you was that if

your caveat had spelt out in detail your rights

against the then registered proprietor in relation
to the option, would it not have said, "provided
that the option contained in the lease is not valid

as against the then registered proprietor"?

MR COURTIS: Well, it would not have said that in those

words but the effect of law would have been - and

we concede this point - that in relation to a prior

registered proprietor, that is, a registered
proprietor who took title before we registered our
caveat, we would have to concede that in relation
to that registered proprietor we would have no

protection under section 68 of the Transfer of Land

Act.

DEANE J:  Does that not mean that so far as your caveat

purported to qualify the title of the then

registered proprietor, it was wrongly lodged?

MR COURTIS:  No, with respect. We would say that we have

done no more than avail ourselves of the protection

of section 68, in that we have done - - -

McHUGH J: But Western Acquisition could have had your caveat

removed, could it not?

MR COURTIS: _ It could, we concede that, but as a fact it did

not-.

DEANE J: Well does that not mean that it was wrongly

lodged?

MR COURTIS:  No, with respect. What it means is, in the

absence of Western Acquisition, taking action to

enforce its own rights as it saw them and, upon the

fact as in fact it occurred, us lodging our caveat

Leros 11 8/8/91

and then Leros coming along, purchasing, not only

just with notice, we would say more, expressly

taking, subject to our interest, because it noted

our caveat as an encumbrance on the transfer, on the happening of those sets of facts, section 68

applies.

DEANE J:  I think we appreciate that, but what I was asking

you was, to the extent that your caveat was an

encumbrance upon the title of the then registered

proprietor, was it not wrongly lodged? I mean,

what right did you have to enter an encumbrance
upon the title of a registered proprietor against

whom the option was invalid?

MR COURTIS: Well, conceding as we do that that registered

proprietor had the right to take action for an

order of the court to remove the caveat, that does

not necessarily mean that what we did was so

completely wrong as could never had been, if you

like, rectified, simply by the appropriate fact

situation arising and the section 68 situation

coming up or emerging. What we - - -

DEANE J:  I understand what you say in answer to my

question.

MR COURTIS: Yes, thank you. Well, if Your Honours please,

that is the short point and we simply submit that,

in relation to the special leave application, this

is not in fact a special leave situation; no

special leave point has emerged and that is our

position, if Your Honours please.

MASON CJ: Thank you.

MR HEENAN:  May it please Your Honours, again we have put

forward a written outline of submissions. May I

inquire if Your Honours have had an opportunity

to - - -

MASON CJ: Yes, we have it.
MR HEENAN:	May I be so bold as to ask if Your Honours are

familiar with it?

DEANE J:  Can we take a moment, while I make sure I am

familiar with it, if it is convenient.

MASON CJ:	We are familiar with it.
MR HEENAN:	There are two sections in the Transfer of Land

Act which are critical to the question of

indefeasibility and the interest taken by a new

proprietor subject to the state of the register.

They are section 68 and section 134. We say that

Leros 12 8/8/91

this case depends on the final clause in section 68

of the Act.

Your Honours, our submission is that the

decision of the Full Court is correct for the

reasons given by His Honour the Chief Justice.

With all respect, we would not seek to support the

decision for the reasons given by His Honour

Mr Justice Pidgeon in so far as they relate to the

present registered proprietor taking subject to the

first respondent's caveat.

Two questions, in our respectful submission,

and only two, arise out of the application of

section 68 to this case. Might I just take

Your Honours to section 68 and the ultimate

provision in it dealing with lessees in possession

under short leases. They are one of the exceptions

to the indefeasibility which is otherwise acquired

by registration, as Your Honours, of course, are

aware. It provides that the registered proprietor

takes subject to:

any prior unregistered lease or agreement for

lease or for letting for a term not exceeding

five years to a tenant in actual possession

notwithstanding the same respectively may not

be specially notified as encumbrances on such

certificate or instrument -

and here is the critical phrase -

but no option of purchase or renewal in any

such lease or agreement shall be valid as

against a subsequent registered interest

unless such lease or agreement is registered

or protected by caveat.

The two questions to which I alluded are: who may protect that lease or unregistered interest?

We would say any person who has an interest, even a	derivative interest. It need not be the possessor	of that interest. It is sufficient if, as here, a
person who derives an interest such as the bank has done under that unregistered lease seeks to protect
it.

The second question is: what has to be

protected? Is it the option to renew or purchase,

or is it simply the lease or agreement for lease?

Say, as a plain matter of statutory construction,

the option of purchase or renewal in such

unregistered lease or agreement shall be valid if

the lease is protected caveat.

This lease was protected by the bank's caveat.

My learned friend, Mr Pullin's, submission, caveat

Leros 13 8/8/91

fell short test, imposed by a line of authority

which has been, in our respectful submission ..... in

New South Wales and is subject to very trenchant

criticism, a decision of Mr Justice Jeske in the

Supreme Court of the Australian Capital Territory,

in a legislative domain which is different to that

in Western Australia. It is no reason to impose an
obligation under our section 68 ..... at the option

to renew or extend must be specifically protected

by caveat. It is sufficient, in our respectful

submission, if the lease or the agreement lease is

so protected.

Now, if that interpretation of section 68 is

accepted - and it was certainly the interpretation
accepted by the learned Chief Justice - then the

bank is squarely within the statutory protection

and the present applicant and his two predecessors

in title took expressly subject to the bank's

caveat and that interest, so the bank has the

statutory protection.

It may be fortuitous that it was the bank that

sees the day and took the protective relief because

it has allowed the first respondent belatedly to

file a caveat protecting a similar interest, but

the order of the lodgment of the caveats, in our

respectful submission, should not in any way affect

the protection of the unregistered interest which

exists.

Now, as set out in paragraphs 4 and 5 of our

written outline, the state of the register was that

all relevant registered proprietors took expressly

subject to the bank's caveat, and the last

registered proprietor, the present applicant, took

subject to the first respondent's caveat.

Now, there is something of an anomalous

position created by the prior declaration of

His Honour Mr Justice Nicholson in proceedings to

which the bank were not a party, proceedings

between the first respondent and the applicant's

predecessor in title which His Honour

Mr Justice Nicholson declared that the bank's

caveat was not adequate to protect the tenant's,

the first respondent's, interest.

That decision has been held to be wrong by the

Full Court. There has - - -

MASON CJ: But the appeal was dismissed.

MR HEENAN: Well, let me put it this way: His Honour

the Chief Justice did not agree with the conclusion

reached by His Honour Mr Justice Nicholson, but

there has been no appeal from that decision and as

Leros 14 8/8/91

it stands it is a binding declaration of right as

between a predecessor in title of the applicant and

the first respondent.	We say it is a wrong
decision;	we say we are not bound by it and the

reasons why we are not bound are set out in
paragraph 8 of our outline. Those reasons have to
do with the contention that while our contractual
interests derive from the first respondent, our

protected position on the register takes a

different derivation. We have been able to bring

ourselves within the protection of section 68 by

our actions in lodging the caveat against the

granter, the action to extend or renew. That means

that we are not a privy of the first respondent and

we are not bound by that declaration. There are a

series of reasons for that which I will not go to

which deal with the law of res judicata and issue

estoppel, but so long as we remain as a mortgagee

by way of sub-demise, our interest, we would say,

is within section 68 expressly.

Your Honours, returning therefore to

section 68, to make good his criticisms of the

judgment below, my learned friend Mr Pullin would

have to be able to satisfy Your Honours that there

was a good arguable case that the unregistered

interest under the lease or agreement can only be

protected if the lessee lodges the caveat and any

subsequent or derivative caveat is insufficient.

And we would also need to satisfy Your Honours that

there was a good arguable case that section 68
requires that the option to purchase be expressly

mentioned in the caveat, rather than the lease or

the agreement for lease which it is derived. May

it please Your Honours.

MASON CJ: Thank you, Mr Heenan.

MASON CJ: Thank you, Mr Heenan. Yes, Mr Pullin?

MR PULLIN: Your Honours, my learned friend has referred to	the closing words of section 68, and says that the	lease may be protected by caveat and that is quite
correct, but that is not what the bank did. The
bank lodged a caveat claiming an interest as
mortgagee of leasehold by way of sub-demise. So it
cannot be that my learned friend's position is
availed by saying that they lodged that caveat.
The fact is that the lease was not protected by
caveat. It is not our argument that only the
lessee must lodge the caveat at all. The lease was
not protected in this case.
Now, could I then continue with my submissions concerning what the Chief Justice was saying
concerning the caveat and why he held it was good, and we say it can be exposed as fallacious at
Leros	15	8/8/91

various points and if I can go back to page 43, and lodged by the bank was mortgagee of leasehold by

way of sub-demise that then raises, squarely, the

New South Wales line of authority. Is that

sufficient, or does the New South Wales line of

authority in fact say that that is not sufficient

and that it would be necessary to spell out and

specify as an interest the fact that the - - -

MASON CJ:  We need not trouble you further, Mr Pullin. There

will be a grant of special leave in this case.

AT 4.48 PM THE MATTER WAS ADJOURNED SINE DIE

Leros 16 8/8/91