New South Wales Supreme Court CITATION : Barclay Entertainment Pty Ltd v Commonwealth Bank of Australia [2009] NSWSC 1463 HEARING DATE(S) : 18 December 2009 JUDGMENT OF : Gzell J EX TEMPORE JUDGMENT DATE : 18 December 2009 DECISION : Approval of lodgement of caveats withheld. Application to extend lapsed caveat dismissed. CATCHWORDS : CONVEYANCING - Land Titles under the Torrens System - Caveats against Dealings - claim that right of pre-emption under a management agreement "... had transmuted into an equitable interest in the property upon the conditions for exercise of the pre-emption rights having being satisfied" - conditions not satisfied - no interest in land - claim to right of first refusal under lease - right of no effect unless land subdivided - no obligation to subdivide - no subdivision carried out - no interest in land - extension of third caveat sought - caveat had lapsed CATEGORY : Procedural and other rulings Barclay Entertaintment Pty Ltd (Plaintiff) (In person) PARTIES : Commonwealth Bank of Australia (First Defendant) PPB Australia (Second Defendant) FILE NUMBER(S) : SC 5749/09 COUNSEL : J Thomson (Defendants) SOLICITORS : Freehills (Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION GZELL J FRIDAY 18 DECEMBER 2009 5749/09 BARCLAY ENTERTAINMENT PTY LTD v COMMONWEALTH BANK OF AUSTRALIA EX TEMPORE JUDGMENT 1 On 17 December 2009 a caveat numbered AF201889X was lodged by Gypsy Vanner Horses of Australia Pty Ltd against land owned by Toma Services Pty Ltd, portion of which is leased to Barclay Entertainment Pty Ltd, the plaintiff. Mr Toma, the general manager of Barclay, informed me that the caveat was not accepted by the Land and Property Information Division until the approval of the court is granted to its lodgement. 2 The caveatable interest identified in the document is a pre-emption right contained in management agreements dated 1 September 2006 and 7 November 2006: "which have transmuted into an equitable interest in the property upon the conditions for exercise of the pre-emption rights having been satisfied." 3 The right of first refusal is contained in clause 22.1 of the management agreement under which Gypsy Vanner claims an interest. It is as follows: "If the Guarantor wishes to sell, transfer, assign or otherwise dispose of its ownership of any Property it shall not do so unless the Guarantor shall have served on LIHM a copy of the contract for sale that the Guarantor is prepared to enter into which has been fully completed with all details (including without limitation price and deposit) other than the name of the purchaser ("Contract")." 4 Not only is there no evidence that Toma Services, the Guarantor, wishes to take one of the steps mentioned in the clause, but also the right created thereunder does not, in my view, create a caveatable interest in the land. 5 On that basis I decline to give approval to the lodgement of the caveat. 6 A second caveat numbered AF201250D was lodged over the land yesterday by Barclay. It described the caveatable interest as "Rights of first refusal". 7 Under the lease purchased by Barclay's predecessor from Fireant Productions Pty Ltd in March 2006, a right of first refusal was contained in cl 25.1. It provided: "The Lessor covenants and agrees with the Lessee that the Lessor will not at any time during the term of this Lease (such term to include any renewal of such Lease) sell or transfer the Premises without first offering the same to the Lessee for the same price and on the same terms as to payment as those upon which the Lessor is willing to sell the same, and such offer by the Lessor to sell the Premises to the Lessee shall be made in accordance with the following provisions." 8 There followed a series of provisions including cl 25.5.1 which provided: "Despite the foregoing provisions of clause 25, the said right of first refusal does not arise and shall be of no force or effect unless and until the Land is subdivided pursuant to the Strata Titles (Freehold Development) Act, 1973 and the premises comprises a lot in the strata plan registered at Land & Property Information NSW." 9 Further, cl 25.5.3 stated: "Nothing in this clause 25 or elsewhere in this Lease imposes or creates any obligation on the Lessor to bring the Land under the Strata Titles (Freehold Development) Act, 1973 and which is a matter for the sole discretion of the Lessor." 10 Not only is this not a situation in which the Lessor seeks to sell the land, but also the condition precedent to the right of first refusal of subdivision of the land has not occurred. The provision does not give rise to an interest in land that would support a caveat. 11 For these reasons, with respect to the second caveat lodged yesterday, I decline to grant approval. 12 By par 1 of a summons filed on 15 December 2009, Barclay sought the extension of another caveat AE906644A, a copy of which was found after I had concluded the hearing of the applications by the Commonwealth Bank in new proceedings against Barclay, Gypsy Vanner and Mr Toma. 13 The evidence established that the caveat had lapsed. In consequence, I dismissed par 1 of the summons and stood the balance over before the Registrar at 9.15 am on Tuesday 2 February 2010. I reserved the costs. *********** 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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