Summary
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.
Facts
In Mathews v Council of the Shire of Gunnedah [2010] 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 stamped.
Unstamped instruments
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 [2002] 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 caveats.
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 hangar; and
- allowing Council to lodge a plan of subdivision.
The offer was not accepted.
Judgment
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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