Telsa Nominees Pty Ltd v Bingi Pty Ltd

[2005] NSWSC 1323

CITATION:	Telsa Nominees Pty Ltd v Bingi Pty Ltd [2005] NSWSC 1323
HEARING DATE(S):	12/12/05
JUDGMENT DATE :	12 December 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	White J
DECISION:	1. Upon the plaintiff by its counsel giving the usual undertaking as to damages and, also, undertaking to withdraw any further caveat which it might lodge pursuant to the leave given hereunder, on Friday 16 December 2005, unless the Court extends that period, I give leave pursuant to section 74O(2) of the Real Property Act to the plaintiff to lodge a further caveat in the terms of caveat AB20607U; 2. Stand over the Summons and the Notice of Motion to Thursday, 15 December 2005 at 10am before the Duty Judge; 3. Abridge time for service of the Summons and Notice of Motion to 12 Noon on 13 December 2005; 4. Direct that service be effected on Livingstone Property Conveyancing at Suite 34, Chatswood Village, Oscar Street, Chatswood, and at the registered office of the defendant.

CATCHWORDS:	REAL PROPERTY - Application to extend caveat - Insufficient grounds for dispensing with service otherwise required by s 74K of the Real Property Act - Order under s 74O permitting a caveat on identical terms to be lodged on condition that it be withdrawn on the return date unless the court orders otherwise.
LEGISLATION CITED:	Real Property Act 1900 (NSW)
CASES CITED:	Malouf v O'Donohue [2001] NSWSC 335
PARTIES:	Telsa Nominees Pty Ltd v Bingi Pty Ltd
FILE NUMBER(S):	SC 6231/05
COUNSEL:	Plaintiff: J Miller Defendant: N/A
SOLICITORS:	Plaintiff: Swaab Attorneys Defendant: N/A

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WHITE J

Monday, 12 December 2005

6231/05 Telsa Nominees Pty Ltd v Bingi Pty Ltd

JUDGMENT

1 HIS HONOUR: By notice of motion filed in Court today, the plaintiff seeks an order pursuant to section 74K of the Real Property Act 1900, extending caveat AB296607Y, lodged in respect of land at 101/79 Gould Street, Bondi, being folio 16/SP3988.

2 The plaintiff is the trustee of a superannuation fund called the Two Gables Superannuation Fund, having been appointed to that office on 31 March 2005 in place of Happle Pty Ltd.

3 On 27 September 2004, Happle Pty Limited, in its capacity as trustee of that trust, made an advance to Bagnaay Pty Limited, which advance was guaranteed by the defendant, Bingi Pty Limited. It was a term of the agreement for that advance that Bingi give a mortgage over the Bondi property to secure the borrower's obligations. It acknowledged that the lender was entitled to lodge a caveat in relation to the borrower's and Bingi's obligations.

4 A caveat was lodged by Happle Pty Limited on or about 15 October 2004, and was given the number AB20607U. Counsel for the plaintiff seeks leave to amend the Summons and notice of motion to substitute that number for the number of the caveat referred to in paragraph 1 of the Summons and paragraph 3 of the notice of motion. I give that leave. I will make the alteration by hand to the documents which have been filed.

5 By letter dated 13 October 2005, the defendant, through the firm of licensed conveyancers Livingstone Property Conveyancing, served a lapsing notice in respect of the caveat. However, that lapsing notice was subsequently withdrawn. A new lapsing notice was given under cover of a letter dated 21 November 2005.

6 The plaintiff says that that lapsing notice was not served in accordance with the requirements of the Real Property Act. It says that the correspondence was received by the business manager of the plaintiff on 23 November 2005. It is not clear whether 23 November 2005 was the date on which the document was received by post at the offices of the plaintiff. If the document was, or is taken to have been, validly served and if the date of service was 21 November 2005, then the caveat will expire today.

7 On 30 November 2005, the plaintiff's solicitors wrote to the defendant and to Livingstone Property Conveyancing, demanding the withdrawal of the lapsing notice. The plaintiff's solicitors asserted that the plaintiff had a caveatable interest pursuant to the facility agreement of 27 September 2004, and stated that the advance made under that agreement, which the defendant had guaranteed, had not been repaid. The plaintiff's solicitors required that the lapsing notice be withdrawn by no later than 2 December 2005. There was no immediate reply to that correspondence.

8 On Thursday, 8 December 2005, the plaintiff’s solicitors wrote again to Livingstone Property Conveyancing, foreshadowing the institution of proceedings. On 8 December, Livingstone Property Conveyancing replied and stated that they were seeking their client's instructions.

9 The plaintiff's solicitors wrote again on Friday, 9 December 2005, requesting that the notice be withdrawn and to be provided with written confirmation of the withdrawal. There was no reply to that correspondence.

10 Pursuant to subs 74K(3) of the Real Property Act, the Court may not hear an application under subs 74K(1) for an order extending the operation of a caveat, unless it has made an order dispensing with service, or unless it is satisfied that all interested parties have been served with copies of the application before the hearing.

11 Counsel for the plaintiff submitted that I ought to make an order dispensing with service. In support of that submission, he pointed out that there was a strong prima facie case that the plaintiff has a caveatable interest. He also pointed out that the previous lapsing notice had been withdrawn and that no grounds had been advanced in the correspondence between the plaintiff's solicitors and the defendant's firm of licensed conveyancers, which identified the ground upon which the defendant claims to be entitled to serve a lapsing notice.

12 I do not think that that is a sufficient reason for dispensing with service. The defendant is entitled to be heard. It may be that there are grounds, which are not immediately apparent, why it may be said that the plaintiff either does not have a caveatable interest or, in any event, that it ought not be permitted to retain the caveat.

13 In those circumstances, it seems to me that the appropriate course is to follow that taken by Young CJ in Eq, in Malouf v O'Donohue [2001] NSWSC 335, and to make an order under s 74O of the Act, allowing a fresh caveat to be lodged in identical terms to the current caveat, on condition that that caveat will be withdrawn on the return date of the Summons and notice of motion, unless the Court extends the period.

14 Accordingly, upon the plaintiff by its counsel giving the usual undertaking as to damages and, also, undertaking to withdraw any further caveat which it might lodge pursuant to the leave given hereunder, on Friday 16 December 2005, unless the Court extends that period, I give leave pursuant to section 74O(2) of the Real Property Act to the plaintiff to lodge a further caveat in the terms of caveat AB20607U.

15 I stand over the Summons and the notice of motion to Thursday, 15 December 2005 at 10am before the Duty Judge.

16 I abridge the time for service of the Summons and notice of motion to 12 noon on 13 December 2005.

17 I direct that service be effected on Livingstone Property Conveyancing at Suite 34, Chatswood Village, Oscar Street, Chatswood, and at the registered office of the defendant.

******