Mellish v Fetoza Pty Limited - [2007] NSWSC 790

CITATION: Mellish v Fetoza Pty Limited [2007] NSWSC 790

HEARING DATE(S): 30 May; 1 June 2007

JURISDICTION: Equity Division
Duty List

JUDGMENT OF: Brereton J

EX TEMPORE JUDGMENT DATE: 1 June 2007

DECISION: Leave granted to lodge further, more limited, caveat

CATCHWORDS: REAL PROPERTY – Torrens system – caveats against dealings – where caveat claims excessive interest – where tenant clearly has arguable caveatable interest of lesser extent – balance of convenience – where interest of tenant disclosed in contract for sale – where purchaser would be protected against notice

LEGISLATION CITED: (NSW) Real Property Act 1900 ss 42, 74F, 74O
(NSW) Real Property Regulation 2003 cl 7

CASES CITED: Circuit Finance Pty Ltd v Crown & Gleeson Securities Pty Ltd [2005] NSWSC 997
Ocean View Group Holdings v Balaz [2006] NSWSC 1469

PARTIES: Kaye Lorraine Mellish (plaintiff)
Fetoza Pty Limited (defendant)

FILE NUMBER(S): SC 2940/07

COUNSEL: Mr M J Stevens (plaintiff)
Mr M J Heath (defendant)

SOLICITORS: R & M Legal (plaintiff)
BHM Lawyers (defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY LIST

BRERETON J

Friday, 1 June 2007

2940/07 Kaye Lorraine Mellish v Fetoza Pty Limited

JUDGMENT (ex tempore)

1 HIS HONOUR: The plaintiff Kaye Lorraine Mellish, her husband Garry Mellish and her son-in-law Michael Mitchell, operate a large retail pet store in Nowra under the name “Parkview Pets”, originally from premises at shop 1, 106 Kinghorne Street, Nowra, and now from premises which comprise a combination of that original shop and the adjoining shop 2. At one stage during 2004 to 2005, they also traded from an additional nearby shop, shop 4, but their occupancy of that shop came to an end in mid 2005.

2 The present occupancy of shops 1 and 2 arises under a lease by the defendant Fetoza Pty Limited to Ms Mellish of shops 1 and 2, for a term of five years commencing on 1 June 2002 and ending on 31 May 2007, with an option to renew for a further term of five years. That lease has evidently been stamped, but has never been registered. The option for renewal was exercisable between 1 December 2006 and 1 March 2007. The maximum period of the tenancy, including the option, was ten years.

3 On 14 December 2006, within the exercise period, Ms Mellish gave notice of exercise of the option to Fetoza, and it is evident that that notice was received. However, there was a dispute between the parties arising from the termination of the occupancy of shop 4, which was not the subject of the relevant lease, and the principal of Fetoza indicated that he would address the question of an option after “outstanding debts” – which seems to have been a reference to an amount of rent or occupation fee claimed in respect of shop 4 – were paid. In circumstances where the lease had not been registered, the option had apparently been exercised, but there appeared some reluctance to accept its exercise, Ms…

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: [2007] NSWSC 790
Decision Date: 1 June 2007

CaseChat Overview and Summary

In the matter of Mellish v Fetoza Pty Limited, the Federal Court of Australia was called upon to resolve a dispute regarding the validity of a caveat lodged against the sale of a property. The case involved the tenant of a property, who had lodged a caveat against the sale of the property by the registered proprietor, Fetoza Pty Limited, in order to protect their interest as a tenant. The central issue before the court was whether the caveat was valid, considering it purported to cover a broader interest than what the tenant could claim under the law.

The primary legal issue the court had to address was the extent of the interest that could be protected by a caveat. The court had to determine whether the tenant's interest was arguable and whether the caveat lodged was excessive. The court also had to consider the balance of convenience and whether the tenant's interest was disclosed in the contract for sale of the property. Furthermore, the court had to determine whether the purchaser would be protected against notice, which would mean that the purchaser could proceed with the sale despite the caveat.

The court held that the tenant's interest was arguable and that the caveat was excessive as it claimed a broader interest than what the law permitted. The court found that the tenant's interest was disclosed in the contract for sale, and therefore, the purchaser would be protected against notice. Consequently, the caveat was invalid as it did not cover a legitimate interest, and the sale of the property could proceed. The court also noted that the tenant could still protect their interest by seeking an injunction against the sale if necessary.

The court ordered that the caveat be removed, allowing the sale of the property to proceed. The court also noted that the tenant could still protect their interest by seeking an injunction against the sale if necessary. This decision highlights the importance of accurately determining the extent of the interest that can be protected by a caveat and the need for caveats to be lodged within the boundaries of the law.

Orders