Martin v Carlisle [2008] NSWSC 1276

New South Wales Supreme Court

CITATION : Martin v Carlisle [2008] NSWSC 1276

HEARING DATE(S) : 21 November 2008

JUDGMENT DATE : 21 November 2008

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

EX TEMPORE JUDGMENT DATE : 21 November 2008

DECISION : Caveat removed; Defendant to pay Plaintiff's cost on indemnity basis.

CATCHWORDS : CAVEAT – INDEMNITY COSTS – Defendant lodged caveat incurably bad in form – Defendant's purpose was to coerce payment of unsecured loan – whether Defendant should pay Plaintiff's costs on indemnity basis.

LEGISLATION CITED : Real Property Act 1900 (NSW) – s 74MA

CATEGORY : Principal judgment

PARTIES : Judith Ellen Martin (Plaintiff) Brian Carlisle (Defendant)

FILE NUMBER(S) : SC 5740/08

COUNSEL : D.L. Cook (Plaintiff) R. Legg (Sol) (Defendant)

SOLICITORS : McCabe Terrill (Plaintiff) Burridge & Legg (Defendant)

5740/08 Martin v Carlisle

JUDGMENT – Ex tempore

21 November, 2008

1 This is a Summons for the removal of a caveat pursuant to s 74MA of the Real Property Act 1900 (NSW). The basis of the application is that the caveat is incurably bad in form. 2 There is no question but that the caveat is incurably bad in form in that it fails to state anything at all under the heading "Estate or Interest Claimed Nature of the Estate or Interest in the Land" . Failure to disclose any interest or estate at all is a defect which cannot be cured by any means, so that there can be no basis for retaining the caveat on the title. I do not think that Mr Legg, the solicitor who appears for the Defendant, suggests that there is any ground upon which the caveat can be maintained. I will therefore order its removal. 3 The contest has been as to whether or not the Defendant should pay the Plaintiff's costs of this application on an indemnity basis. 4 Before commencing these proceedings, the Plaintiff's solicitor wrote to Mr Legg pointing out very clearly that the caveat was incurably bad in form. He advised that it was holding up the sale of the subject property and requested that it be removed forthwith. He expressly advised that if the caveat was not removed, the Plaintiff would seek indemnity costs on an application to the Court for its removal. Mr Legg responded but did not attempt in his letter to justify the validity of the caveat. 5 Mr Legg now submits that the Defendant lent money to the Plaintiff. That seems to be the case. However, the document signed by the Plaintiff evidencing the loan does not create any security interest whatsoever in the Plaintiff's property. The loan was, clearly, unsecured. The mere fact that the Plaintiff borrowed money from the Defendant does not give rise to any caveatable interest in the Plaintiff's land in favour of the Defendant. 6 That position having clearly been pointed out to the Defendant through his solicitor and the Defendant having been given a proper opportunity to withdraw the caveat without further expense to the Plaintiff, this is a case in which indemnity costs ought to be ordered. It is clear from what has happened, and indeed from the evidence of the Defendant himself, that the caveat was placed on the title purely for the purpose of coercing the Plaintiff into repaying a debt. That is not a proper purpose for the lodgement of a caveat, as has been pointed out in many authorities, and recourse to that kind of coercion should be discouraged by indemnity costs orders. 7 I make an order in terms of paragraph 1 of the Plaintiff's Summons. The Defendant will pay the Plaintiff's costs of the proceedings on the indemnity basis. 8 I direct that these orders be passed and entered forthwith.