New South Wales Supreme Court CITATION : Watts v Brooks [2001] NSWSC 423 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 2711/01 HEARING DATE(S) : 18/05/01 JUDGMENT DATE : 18 May 2001 Garry Allan Watts, Gregory Ross McCray, Justin Dowd - Plaintiffs PARTIES : Michael Joseph Brooks - First Defendant Sandra Jane Brooks - Second Defendant JUDGMENT OF : Barrett J COUNSEL : Ms Y. Poon (Solicitor) - Plaintiffs ex parte SOLICITORS : Watts McCray - Plaintiffs CATCHWORDS : REAL PROPERTY - Caveat against dealing - Application ex parte to extend - All interested parties not served - Not appropriate to dispense with service - Order allowing replacement caveat LEGISLATION CITED : Real Property Act, ss.74K and 74O CASES CITED : Malouf v O'Donohoe [2001] NSWSC 335 Wonderland Business Park Pty Ltd v Hartford Lane Pty Ltd [2001] NSWSC 86 DECISION : Leave to lodge further caveat granted. THE SUPREME COURT REVISED OF NEW SOUTH WALES EQUITY DIVISION BARRETT J FRIDAY 18 MAY 2001 2711/2001 - GARRY ALLEN WATTS & ANOR v MICHAEL JOSEPH BROOKS & ANOR JUDGMENT HIS HONOUR: 1 The plaintiffs seek an order under s.74K of the Real Property Act extending the operation of caveat no. 6783604S which has been entered on the title of land of which the registered proprietors are Michael Joseph Brooks and Sandra Jane Brooks. 2 The plaintiffs are solicitors who acted for Mr Brooks in Family Court proceedings and received from him a document by which he purported to charge in the plaintiffs' favour all his estate and interest in the relevant land with the payment of costs, disbursements and interest to become payable to them. 3 Mr and Mrs Brooks have contracted to sell the property. Settlement of the sale was scheduled for today, 18 May 2001. The solicitors acting for Mr and Mrs Brooks on the sale took action to secure the lapsing of the caveat entered by the plaintiffs and, as a result of that action, the caveat will lapse on Monday next, 21 May 2001. 4 Because settlement was expected to take place before the caveat lapsed and arrangements had been made for Mr Brooks' debt to the plaintiffs to be satisfied out of the sale proceeds, the plaintiffs were content to allow the lapsing to take its course. About 4.30 pm yesterday, however, the solicitors acting for Mr and Mrs Brooks on the sale informed the plaintiffs that, for reasons not immediately relevant, settlement had been postponed by about three weeks. The plaintiffs therefore had to reconsider very urgently their decision simply to let the caveat lapse in accordance with the notice which had already been given. In order that their position should continue to be protected, they wished to see the operation of the caveat extended. 5 With that end in view, the plaintiffs have applied this morning ex parte for an order under s.74K. The difficulty they face is that, because of the explicit provisions of s.74K(3), the Court may not even hear their application under s.74K(1) unless either it has made an order dispensing with service or it is satisfied that all interested parties disclosed by the lapsing notice have been served with copies of the application. 6 Ms Poon, who appeared for the plaintiffs, informed me that Mr and Mrs Brooks had not been served with copies of the plaintiffs' application, although she was also able to tell me that the solicitors acting for them on the sale had been made aware that the application was proposed and had not notified any desire on their clients' part to play any part in it. But in view of the clear terms of s.74K(3), that is not sufficient to enable me to proceed under s.74K(1) unless an order dispensing with service has been made. 7 In the course of dialogue with Ms Poon, I referred to the decision of Young CJ in Eq in Malouf v O'Donohoe [2001] NSWSC 335 in which his Honour referred in turn to the decision of the then Chief Judge in Equity, Hodgson J, in Wonderland Business Park Pty Ltd v Hartford Lane Pty Ltd [2001] NSWSC 86. The upshot of Malouf v O'Donohoe is that care must be taken in relation to the part of s.74K(3) dealing with dispensing with service. Young CJ in Eq said that it is extremely difficult to see any justification for dispensing with service in cases where lawyers have left their application for dispensing with service to the last day and no other factor is present. He went even further: "Indeed, it is difficult to see when the Court would ever be justified in dispensing with service in a case where there was an identifiable caveator in the jurisdiction." 8 In light of those remarks, I am loath to make an order dispensing with service. I readily acknowledge that the present case is distinguishable from one where lawyers have left their application for dispensing with service to the last day. In the present case the plaintiffs were, to my mind, justified in allowing matters to proceed as they did in expectation that settlement of the sale would occur before the caveat lapsed. When that expectation changed suddenly late yesterday, they were also justified in seeking to take steps to preserve their caveat but, as I say, the remarks of the Chief Judge in Malouf v O'Donohoe make me think that I should not dispense with service. It is preferable to proceed in another way. 9 That other way is suggested in Malouf v O'Donohoe. In that case the Chief Judge made an order under s.74O allowing a fresh caveat to be lodged in identical terms to the current caveat. He made that order on condition that the new caveat would be withdrawn on a certain day unless the Court extended the period. 10 In the present case I propose to make an order under s 74O to allow a new caveat to be lodged in place of the caveat which is about to lapse. The present circumstances are not such as to enable me to follow the Chief Judge's example of fixing a date on which that caveat should be withdrawn. The new caveat will therefore take effect without any such qualification and in accordance with the Act so that it will remain unless and until it is withdrawn by the caveators or lapses in accordance with the statutory provisions. 11 The making of an order under s.74O is an appropriate course in the present case because of the circumstance of the unexpected removal at the very last minute of the reasonable expectation that the caveat would not be required beyond today. That is a special circumstance. My willingness to resort to s.74O in this case as a way of accommodating that special circumstance should not be taken as any indication that such a course may be regarded as a convenient and generally available way around the clear statutory prescription in s.74K(3). 12 I grant leave to the plaintiffs to lodge with the Registrar General a further caveat in respect of the estate or interest claimed by the plaintiffs in caveat no. 6783604S and purporting to be based on the same facts as that caveat. I direct that this order may be taken out forthwith. ****** Last Modified: 05/30/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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