A caveator ought ensure that the instrument founding the caveat
is stamped, the caveat does not extend beyond the caveator's
interest in land, and does not restrict the registered proprietor
more than necessary to protect the caveator's interests.
In Mathews v Council of the Shire of Gunnedah 
NSWSC 142 (5 May 2010), the plaintiff applied to extend two caveats
pursuant to s74K Real Property Act 1900 (NSW)
("Act"). The land which was the subject
of the caveats formed a part of the Gunnedah Airport, owned by the
defendant, Council of the Shire of Gunnedah.
The plaintiff claimed he had a caveatable interest as assignee
of an unregistered lease. Neither the lease nor the assignment was
An instrument that is chargeable with duty under the Duties
Act 1997 (NSW) is not available for use in law or equity for
any purpose, and may not be presented in evidence unless it is duly
stamped: s304(1) Duties Act. However, a Court may admit the
instrument into evidence if, where the person who produces the
instrument is not the person liable for duty, the person forwards
the instrument to the Chief Commissioner of State Revenue with the
name and address of the person liable for duty: s304(2)(b) Duties
Act. The plaintiff undertook to comply with this.
Ball J held that he would not decide the application against the
plaintiff because the instruments were unstamped. He followed
Weston v Metro Apartments Pty Ltd  NSWSC 682 which
held that where there is a serious question to be tried about the
ability of an unstamped instrument to give rise to an interest in
land, then, if the balance of convenience favours maintaining the
caveat, the caveat should be maintained.
Scope of the lease and caveats
The Court held that the leased land was land on which a hangar
sat, which was a very small portion of the land covered by the
In redeveloping the airport, Council entered into an agreement
with a third party in relation to the land. The agreement was
conditional on registration of a subdivision. The caveats prevent
Council from registering a subdivision plan.
Council made an offer which involved:
removal of the caveats;
lodging of a new caveat limited to the land surrounding the
allowing Council to lodge a plan of subdivision.
The offer was not accepted.
To extend a caveat, a plaintiff must demonstrate that there is a
prima facie case, or a serious question to be tried, and that the
balance of convenience favours an extension. His Honour held that
neither of these elements was satisfied.
The plaintiff ought to have specified that the caveat only
related to the part of the land on which the hangar sat:
s74F(5)(b)(vii) of the Act. Also, the registration of the
subdivision does not affect the plaintiff's interests.
The balance of convenience was in council's favour as the
third party could rescind the contract if the subdivision plan was
not registered, resulting in substantial damages. The plaintiff
could lodge a more limited caveat.
Given Council's offer, the plaintiff was ordered to pay
costs on an indemnity basis commencing several days after the
offer. His Honour granted leave for the plaintiff to file a further
caveat in the terms of Council's offer.
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The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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