Circuit Finance Australia Ltd v Bessounian [2006] NSWSC 1190

New South Wales Supreme Court

CITATION : Circuit Finance Australia Ltd v Bessounian [2006] NSWSC 1190

HEARING DATE(S) : 09/11/06

JUDGMENT DATE : 9 November 2006

JURISDICTION : Equity Division

JUDGMENT OF : Barrett J

EX TEMPORE JUDGMENT DATE : 11/09/2006

DECISION : Order dispensing with service. Order extending operation of caveat.

CATCHWORDS : REAL PROPERTY - Torrens system - caveat against dealing - lapsing notice served - application by caveator for order extending operation of caveat - no service on registered proprietor - attempted service at address given by registered proprietor in application for issue of lapsing notice - whether order under s.74K(3) dispensing with service on registered proprietor should be made

LEGISLATION CITED : Real Property Act 1900, ss.74K, 74N

Circuit Finance Pty Ltd v Crown and Gleeson Securities Pty Ltd [2005] NSWSC 997 CASES CITED : Ex parte Little (1958) 58 SR (NSW) 173 Re Drinkwater (1929) 46 WN (NSW) 202

PARTIES : Circuit Finance Australia Pty Limited - Plaintiff Raphael Bessounian - Defendant

FILE NUMBER(S) : SC 5331/06

COUNSEL : Mr A.C. Casselden - Plaintiff ex parte

SOLICITORS : Leonard Legal - Plaintiff

- 7 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

THURSDAY 9 NOVEMBER 2006

5331/06 - CIRCUIT FINANCE AUSTRALIA LTD v BESSOUNIAN

JUDGMENT

1 The plaintiff claims, as principal relief, a declaration that it has an estate or interest in the defendant's property at Blacktown "pursuant to the charging clause contained in clause 17 of the terms and conditions of the lease agreement dated 27 April 2006 entered into between the plaintiff and the defendant". As an interlocutory measure, the plaintiff claims an order under s.74K(2) of the Real Property Act 1900 extending the operation of a caveat lodged by it and affecting the defendant's property to which the principal claim for relief relates. 2 In the section headed "Estate or Interest Claimed", the caveat contains these words. "Equitable charge arising out of the charging clause in clause 17 of lease agreement executed by the registered proprietor/lessee in favour of the caveator." 3 The instrument by virtue of which the estate or interest is thus said to arise is described as a lease agreement of 20 April 2006. The lease agreement is one that relates to goods, specifically certain electronic or computer equipment. The so-called lessor is the plaintiff. The lessee is described as "Out of Exile Pty Ltd & Raphael Bessounian". 4 The lease agreement provides for what is, strictly speaking, bailment of the goods by the plaintiff to Out of Exile Pty Ltd and the defendant and requires certain payments of money by them. It contains a clause 17 as follows: "As security for the due and punctual payment of the rent and/or the moneys owing and the due and punctual performance of the observance of the terms of this lease, the Lessee, as beneficial owner, hereby charges in favour of the Lessor, all of his right, title and interest in and to the charged property and all property here after to be held or acquired by the Lessee in addition to the charged property and consents to a Caveat or other registrable instrument being lodged to register such charge." 5 The lease agreement contains a definition of "charged property" which refers to the property described in a particular part of its schedule. However, that part of the schedule is blank, with the result that there is no property expressly identified as "charged property" and the plaintiff's claim accordingly rests on the words referring to "all property here after [sic] to be held or acquired by the Lessee". 6 In this respect, the circumstances are the same as those considered by Brereton J in Circuit Finance Pty Ltd v Crown and Gleeson Securities Pty Ltd [2005] NSWSC 997, which involved an identical clause in a lease agreement under which the present plaintiff was lessor. I quote from his Honour's judgment: "[11] The lease agreement, which is between Circuit Finance as lessor and Jason Campbell as lessee, of a Mitsubishi Pajero wagon and accessories, contains, amongst its terms, cl 17 which provides that: As security for the due and punctual payment of the rent and/or the moneys owing and the due and punctual performance and observance of the terms of the lease the Lessee as beneficial owner hereby charges in favour of the Lessor all of his rights, title and interest in and to the charged property and all property here after to be held or acquired by the Lessee in addition to the charged property and consents to a Caveat or other registrable instrument being lodged to register such charge.