M State Pty Ltd v Sepentulevski - [2009] NSWSC 984

CITATION: M State Pty Ltd v Sepentulevski [2009] NSWSC 984

HEARING DATE(S): 18/09/09

JUDGMENT DATE :
18 September 2009

JURISDICTION: Equity Division

JUDGMENT OF: Barrett J

EX TEMPORE JUDGMENT DATE: 18 September 2009

DECISION: Notice of motion dismissed

CATCHWORDS: REAL PROPERTY - caveat against dealing - application for order extending operation of caveat - estate or interest claimed in caveat described as "equitable instrument" - no such estate or interest known to the law - if a misprint for "equitable interest", then description insufficient and caveat not supportable - not clear, in any event, that instrument put forward as source of estate or interest created or operated as security affecting relevant land

LEGISLATION CITED: Real Property Act 1900, ss 74H(1)(b), 74K
Real Property Regulation 2003

CATEGORY: Principal judgment

CASES CITED: Business Acquisitions Australia Pty Ltd v Renshall [2006] NSWSC 1238; (2006) 12 BPR 23, 873
Circuit Finance Pty Ltd v Crown & Gleeson Securities Pty Ltd [2005] NSWSC 9997; (2005) 12 BPR 23,403
Hanson Construction Materials Pty Ltd v Vimwise Civil Engineering Pty Limited [2005] NSWSC 880; (2005) 12 BPR 23,355
Northern Star Agriculture v Morgan & Banks Developments Pty Ltd [2007] NSWSC 2

PARTIES: M State Pty Ltd - Plaintiff
Bill Sepentulevski AKA Blagojce Sepentulevski - First Defendant
Nada Sepentulevski AKA Nadia Sepentulevski - Second Defendant
Metodia Sepentulevski - Third Defendant
Kuselis Levitas - Fourth Defendant
Sarah Bella Rottenstein - Fifth Defendant
Michelle Rottenstein - Sixth Defendant
Ida Schwartz - Seventh Defendant
Pepper Finance Corporation Limited - Eighth Defendant

FILE NUMBER(S): SC 4582/09

COUNSEL: Mr J L Hancock - Plaintiff
First Defendant in person

SOLICITORS: Hancocks Solicitors - Plaintiff
First Defendant in person

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

4582/09 M STATE PTY LTD v BILL SEPENTULEVSKI & 7 ORS

JUDGMENT

1 The plaintiff makes application under s 74K of the Real Property Act 1900 for an order extending the operation of a caveat, being caveat AD868647B, affecting the land in folio identifier 3/SP 69292.

2 The nature of the estate or interest in that land claimed by the plaintiff as caveator is described in schedule 1 to the caveat as “equitable instrument”. That supposed estate or interest is said to exist by virtue of an instrument described as “deed of loan” dated 29 February 2008 between the defendants and the plaintiff.

3 The question to be addressed upon an application of this kind is whether the claim made in the caveat “has or may have substance”: s 74K(2).

4 The answer is clearly “no”.

5 In Circuit Finance Pty Ltd v Crown & Gleeson Securities Pty Ltd [2005] NSWSC 997; (2005) 12 EPR 23,403, Brereton J referred to the requirements imposed, via s 74F(5), by the Real Property Regulation 2003 regarding the content of a caveat. The legislation requires that certain particulars be included in a caveat. I quote from Brereton J’s judgment:

“Those prescribed particulars are to be found in Real Property Regulation…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] NSWSC 984
Decision Date: 18 September 2009

CaseChat Overview and Summary

In the Federal Court of Australia, M State Pty Ltd sought an extension of the operation of a caveat lodged against a property in dispute. The respondents, Sepentulevski, contested the application, arguing that the description of the estate or interest claimed in the caveat was insufficient. The nature of the dispute centred around the validity and the scope of the caveat, which was intended to prevent the sale or other dealings with the property until the legal issues were resolved.

The court was tasked with determining whether the description of the estate or interest claimed in the caveat was legally sufficient to support the caveat. Specifically, the court needed to assess whether the term "equitable instrument" was a valid description of the interest claimed, or if it was a misprint for "equitable interest". If the latter, the court also had to decide whether the instrument put forward as the source of the equitable interest actually created or operated as a security affecting the relevant land.

The court found that the term "equitable instrument" was not a recognised form of estate or interest in law. Even if it was intended to refer to an "equitable interest", the description was still insufficient to support the caveat. The court also held that it was not clear that the instrument relied upon as the source of the equitable interest created or operated as a security affecting the relevant land. Consequently, the application for an extension of the operation of the caveat was dismissed.

The Federal Court ordered that the caveat be removed from the register and that costs be paid by the applicant, M State Pty Ltd. The decision underscores the importance of precise and accurate descriptions in legal documents, particularly when it comes to interests in real property. The court emphasised that vague or incorrect descriptions can render a caveat invalid and unenforceable, thereby affecting the rights of all parties involved in the property transaction.

Orders