New Galaxy Investments Pty Ltd v Thomson

New Galaxy Investments Pty Ltd (NGI) appealed to the Court of Appeal of New South Wales against decisions concerning its lodging of caveats over land and claims for compensation. The dispute arose from contracts of sale for land which allowed for the novation of those contracts to a new purchaser. NGI paid $6 million to the vendors' agent in anticipation of such a novation, but the contracts were ultimately novated to a third party. NGI subsequently lodged caveats, which delayed the completion of the sale. The primary judge had made orders regarding compensation claims under section 74P of the *Real Property Act 1900* (NSW) and costs.

The Court of Appeal was required to determine whether NGI had a caveatable interest in the land, and consequently, whether it had lodged the caveats without reasonable cause, thereby entitling the vendors to compensation under section 74P of the *Real Property Act 1900* (NSW). The court also considered an application for leave to appeal by Francisco Gutierrez trading as Avondale Lawyers, which was related to competing claims to funds held in court.

The Court of Appeal found that NGI did not have a caveatable interest in the land. The payment of $6 million was not made at the express or implied request of the vendors, nor was it a loan to the purchaser. Therefore, NGI had not established a sufficient proprietary interest to support a caveat. Consequently, the court held that NGI had lodged the caveats without reasonable cause. The court also dismissed the application for leave to appeal by Avondale Lawyers.

The appeal by NGI was allowed in part, with certain orders of the primary judge being set aside. The claims of the vendors and another party against NGI for compensation under section 74P of the *Real Property Act 1900* (NSW) were dismissed. The application for leave to appeal by Avondale Lawyers was dismissed, and Avondale Lawyers was ordered to pay the costs of certain respondents. Directions were also given regarding the determination of costs at first instance and on appeal.