New South Wales Supreme Court CITATION : Sundance Land Holdings Pty Ltd v Lacemore Banner Pty Ltd [2007] NSWSC 1285 HEARING DATE(S) : 24 & 30 October 2007 JUDGMENT DATE : 30 October 2007 JURISDICTION : Equity JUDGMENT OF : Hamilton J DECISION : Sum ordered to be paid into Court on withdrawal of caveat fixed at $443,000. CATCHWORDS : CONVEYANCING [189] - Land titles under the Torrens system - Caveats against dealings - Removal – Jurisdiction – Discretion of Courts – Provision of substitute security – Determination of amount. LEGISLATION CITED : Real Property Act 1900 s 74MA Sundance Land Holdings Pty Ltd (formerly known as Saxby Park Pty Ltd) (P) PARTIES : Lacemore Banner Pty Ltd (D1) Registrar General (D2) FILE NUMBER(S) : SC 5097/07 R Sofroniou (P) COUNSEL : S L Bell (D1) Submitting appearance (D2) Jackson Smith Lawyers (P) SOLICITORS : Websters (D1) K O'Keefe (D2) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION HAMILTON J TUESDAY, 30 OCTOBER 2007 5097/07 SUNDANCE LAND HOLDINGS PTY LTD (formerly known as Saxby Peak Pty Ltd) v LACEMORE BANNER PTY LTD & ANOR JUDGMENT 1 HIS HONOUR: The contractual dispute underlying this matter arises from quite complex dealings between three companies, Saxby Peak Pty Ltd (since renamed Sundance Land Holdings Pty Ltd), which is the plaintiff in these proceedings, Barden Nominees Pty Ltd ("Barden") and Lacemore Banner Pty Ltd, which is the first defendant in these proceedings. The dealings concern both land at Nagambie, which was to be acquired for a supermarket, and also land at Barham which was to be acquired for investment purposes. 2 The application that is at present before the Court is an application by the plaintiff to remove from the land at Barham a caveat placed there by the first defendant. The caveat claims a one third equitable interest as tenant in common with the plaintiff and Barden in the land purchased on behalf of the three at Barham. 3 The land at Barham is constituted by Lots 14 and 16. Lot 14 has a frontage to the Murray River. Lot 16 adjoins Lot 14. The land was purchased in 2002 for $325,000 and title was taken in the name of the plaintiff. 4 The first defendant's claim relies upon draft heads of agreement which are not in very clear or satisfactory terms. However, it is arguable that what is conferred upon the first defendant under that document is an equitable one third interest in the land. 5 The plaintiff, in effect, concedes that the first defendant has established that it may have an interest in the land in terms of s 74MA of the Real Property Act 1900. The stance taken by the parties is that the caveat will, in fact, be removed, but that that will be on terms that the plaintiff provides a sum of money by way of payment into Court as security for the first defendant's claimed interest, if it be established. The narrow issue that has been the subject of contention before me is whether that sum should be $300,000, as contended for by the plaintiff, or $443,000, as contended for by the first defendant. 6 There is before the Court a deal of valuation evidence concerning the land on various bases. It would appear from that material that the land is at present zoned Small Rural Holdings under the Wakool Shire Plan. As might be expected, that allows for the subdivision of the land into rural residential lots, but not into urban cottage lots. On the basis of that zoning, the evidence suggests that the present value of the land is about $900,000. The $300,000 contended for by the plaintiff is one third of that sum of $900,000. 7 The evidence also suggests that the land is in the process of being rezoned to Residential, which would permit urban residential lots. This will be achieved under a Local Environmental Plan review being implemented. The draft is expected to be released in the next 30 to 60 days. A valuation of the land on the basis of that rezoning, if it occurs, indicates that the value of the land would be $1,330,000. The $443,000 in payment contended for by the first defendant is calculated as one third of that amount. 8 It should be added that the complicated picture concerning this land contains a third element. The plaintiff and Barden have gone ahead with a different proposal for a holiday resort tourist facility. Development of this sort is apparently permissible within the current zoning and a development consent for that development has already been obtained from the Council. The plaintiff and Barden have already expended considerable sums of money, in the vicinity of $1.3 million, on pursuing that proposal, to which the first defendant has not contributed. But it is plain that a much larger expenditure of some $11 million will be necessary to bring that development to fruition. It may be that that development, if in fact it is carried out, will produce a profit from the land, a good deal down the track, of $5.7 million, of which the first defendant as co owner might be entitled to about $1.8 million, but would have to allow against that a share of the very considerable expenditure made to produce that result. 9 In any event, whilst I have thought it appropriate to state those facts as they appear from the evidence, the first defendant is not pursuing a provision in lieu of the caveat based upon the fruits of that development, but upon the fact that the land may, shortly and perhaps during the pendency of these proceedings, achieve a value of which the first defendant's share would be $443,000 as stated. 10 The plaintiff has contended that that rezoning, has not yet occurred and that the amount to be provided to protect the first defendant in case of withdrawal of the caveat should be limited to the $300,000 calculated in the way I have set out. 11 However, in view of the imminence of the possible rezoning, which would produce a considerable increase in value without further expenditure at this stage, I think it appropriate that the sum to be provided should be the $443,000 contended for by the first defendant. 12 The urgency in this matter is that an existing finance facility with Macquarie Bank Limited expires on 31 October 2007 and needs to be paid out in the near future. This borrowing is for a sum greater than the present value of the land upon the first two bases I have mentioned, because it includes considerable sums spent on the larger development. 13 Ms Sofroniou, of counsel for the plaintiff, has stated from the bar table that, whilst her client stands ready to provide the $300,000 that has been mentioned, there may be doubts about its ability to provide the $443,000. This, however, remains simply a statement from the bar table and there is no evidence to establish that that difficulty would be in fact encountered and ought therefore to be taken into account. 14 Under the circumstances, the amount to be provided should, as I have indicated, be $443,000. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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