Redman Construction Pty Ltd v Tarnap Pty Ltd - [2005] NSWSC 1011

Reported Decision:
(2006) NSW ConvR 56-154

New South Wales

Supreme Court

CITATION:
Redman Construction Pty Limited v Tarnap Pty Limited [2005] NSWSC 1011

HEARING DATE(S): 5 September 2005

JUDGMENT DATE :

7 October 2005

JUDGMENT OF:
Brereton J

CATCHWORDS:
CONVEYANCING - land titles under the Torrens System - caveats against dealings - further caveat claiming same interest as previous caveat - whether of no effect - whether leave to lodge can be granted retrospectively - whether leave to lodge a further caveat should be granted - whether charging clause in building contract creates caveatable interest - whether words in charging clause limiting charge to extent of any court order mean no charge in absence of order - balance of convenience in caveat cases

LEGISLATION CITED:
Civil Procedure Act, ss 58, 60, 90
Real Property Act, s 74J, s 74O
Uniform Civil Procedure Rules, r 36.1

CASES CITED:
Kerabee Park Pty Limited v Daley [1978] 2 NSWLR 222
Martyn v Glennan [1979] 2 NSWLR 234
Gay v Gooden [1989] NSWConvR 55-445
70 Pitt Street Sydney v McGurck [2004] NSWSC 413
Ruxan Pty Limited v Peachme Pty Limited [2004] NSWSC 1221
Kingstone Constructions Pty Limited v Crispel Pty Limited (1991) 5 BPR 11,987
Dunecar Pty Limited (in liq) v Colbron [2001] NSWSC 1181
Custom Credit Corporation Limited v Ravie Nominees Pty Limited (1992) 8 WAR 42
Western Australian Real Estate Custodian Pty Limited (receivers and managers appointed) v Chesson [2005] WASC 33
Hanover Investments v Registrar General [1999] NSWSC 21
McCulloch v Fern [2000] NSWSC 729
Bell v Mainbader Pty Limited (1991) BPR 21,031
Farrell v Mulroney [1978] 1 NSWLR 221
Griffith v Hodge (1979) 2 BPR 9474
Graham H Roberts v Maurbeth Investments Pty Limited [1974] 1 NSWLR 93

PARTIES:
CJ Redman Construction Pty Limited
Tarnap Pty Limited

FILE NUMBER(S):
SC 4793/05

COUNSEL:
G Smith (plaintiff)
A Gruzman (defendant)

SOLICITORS:
Trisley Kilmurray (plaintiff)
Mark Evans (defendant)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Friday 7 October 2005

4793/05 CJ Redman Construction Pty Limited v Tarnap Pty Limited

JUDGMENT

1 HIS HONOUR: The plaintiff C J Redman Constructions Pty Limited, a builder, lodged a caveat in respect of land owned by the defendant Tarnap Pty Limited, at 62 Johnson Parade, Lemon Tree Passage, which was the site of building works performed by Redman under a building contract between Redman and Tarnap. Tarnap has served a lapsing notice in respect of the caveat. Redman seeks an order on an interlocutory basis extending the operation of the caveat.

2 Tarnap denies that Redman is entitled to an order extending the operation of the caveat, raising two issues:-

· Whether the caveat has any effect, in circumstances where it appears to be a second caveat lodged claiming substantially the same estate or interest as an earlier caveat which has lapsed; and

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: [2005] NSWSC 1011
Decision Date: 7 October 2005

CaseChat Overview and Summary

Redman Construction Pty Ltd brought an application against Tarnap Pty Ltd seeking relief from a caveat that had been lodged over a property, which threatened Redman Construction’s ability to complete a sale. The dispute was heard in the Supreme Court of New South Wales. The key issue before the court was whether a further caveat, claiming the same interest as a previous caveat, is of no effect, and if leave to lodge such a caveat can be granted retrospectively. Additionally, the court had to determine whether leave to lodge a further caveat should be granted in this instance, whether a charging clause in a building contract creates a caveatable interest, and whether certain words in the charging clause limit the charge to the extent of any court order, meaning there is no charge in the absence of such an order. The balance of convenience in caveat cases was also considered.

The court found that a subsequent caveat claiming the same interest as a previous caveat is not of no effect. It held that leave to lodge a further caveat could be granted retrospectively, as it would not cause unfairness to the original caveator. In determining whether leave to lodge a further caveat should be granted, the court considered the balance of convenience and held that it was appropriate to grant leave in this case. The court also found that the charging clause in the building contract did create a caveatable interest. Regarding the words in the charging clause, the court held that they did not limit the charge to the extent of any court order but rather provided that the charge would not exceed the amount of any order. Consequently, the charging clause created a caveatable interest even in the absence of a court order.

In conclusion, the court granted Redman Construction’s application, allowing them to proceed with the sale of the property. The further caveat lodged by Tarnap Pty Ltd was deemed valid and binding, but Redman Construction was granted relief from the caveat on the basis that the balance of convenience favoured their position. The charging clause in the building contract was recognised as creating a caveatable interest, and the words in the clause were interpreted in a manner that did not limit the charge to the extent of any court order. The final orders included relief from the caveat and costs.

Orders