Business Acquisitions Aust Pty Ltd v FTFS Holdings Pty Ltd [2006] NSWSC 977

New South Wales Supreme Court

CITATION : Business Acquisitions Aust Pty Ltd v FTFS Holdings Pty Ltd [2006] NSWSC 977

HEARING DATE(S) : 6 September 2006

JUDGMENT DATE : 6 September 2006

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

EX TEMPORE JUDGMENT DATE : 09/06/2006

DECISION : Caveat extended; Defendant to pay costs on indemnity basis.

CATCHWORDS : CAVEATS – COSTS – Defendant sought order for removal of Plaintiff's caveat – application failed – Defendant then lodged lapsing notice – whether conduct unreasonable.

LEGISLATION CITED : Real Property Act 1900 (NSW) – s.74J, s.74K, s.74NA

PARTIES : Business Acquisitions Australia Pty Ltd – Plaintiff FTFS Holdings Pty Ltd - Defendant

FILE NUMBER(S) : SC 4581/06

COUNSEL : M.H. Southwick – Plaintiff Ms P.A. Ryan – Defendant

SOLICITORS : Edwin Davey Lawyers – Plaintiff Accentro Legal – Defendant

Introduction

1 The present Defendant in these proceedings, FTFS Holdings Pty Ltd ("FTFS"), has previously commenced proceedings against the present Plaintiff, Business Acquisitions Australia Pty Ltd ("BAA"), seeking an order under s.74NA of the Real Property Act 1900 (NSW) for the removal of a caveat number AC517246U lodged by BAA against the land of FTFS. 2 The application by FTFS was heard by me on a final basis on 14 August 2006. In an ex tempore judgment delivered on that day I held that none of the grounds for invalidity of the caveat had been made out by FTFS and, accordingly, its Summons was dismissed with costs: see FTFS Holdings Pty Ltd v Business Acquisitions Australia Pty Ltd [2006] NSW SC 846. The consequence, of course, was that the caveat lodged by BAA remained on the title. 3 Four days after the delivery of that judgment, that is, on 18 August 2006, FTFS lodged a lapsing notice in respect of that caveat. BAA's solicitors were served with the lapsing notice on 31 August 2006. On the same day, Counsel for BAA sought and obtained leave to serve a Summons seeking an extension of the caveat pursuant to section 74K of the Real Property Act on short notice. 4 When that Summons was called on in the Duty Judge's list the following day, counsel for FTFS, Ms Ryan, informed the Court that the Summons was opposed, that she was not then ready to proceed with the matter and a timetable for further affidavits proposed by Ms Ryan was then adopted. Both parties have filed affidavits and the Summons filed by BAA has now come on before me for a final hearing. 5 The Summons seeks a declaration that BAA has a caveatable interest in the land of FTFS, as claimed in the caveat, an order that FTFS's lapsing notice be set aside, and an order under s.74K of the Real Property Act extending the caveat until further order of the Court. I should observe at the outset that the declaration sought in the Summons is unnecessary and inappropriate. In the previous proceedings I held that BAA had demonstrated that it had a prima facie case that it had the security interest in the land of FTFS which it claimed in the caveat so that the Court would not order removal of the caveat. Whether that interest as claimed is established is not for this Court to decide on a final basis in proceedings such as this. The validity of the claim by BAA will be tested elsewhere, as I shall explain shortly. 6 The affidavits filed by FTFS in opposition to the present Summons appeared to raise the dispute as to whether FTFS had in fact agreed to be bound by the Mandate Agreement under which BAA claims the security interest which was the subject of debate in the previous proceedings. However, Ms Ryan has confined her submissions today to the following points which I summarise thus. FTFS was entitled to lodge a lapsing notice under s.74J(1) of the Real Property Act because: