Homebuilding Pty Ltd v Litigation Fund WCX Pty Ltd

1. [1]

   The first plaintiff (“Homebuilding”) seeks orders to enforce a charge said to arise under a residential building contract (the “Building Contract”) entered into on 1 September 2017 between the plaintiff as builder and the second and third defendants, Rosario Cappello and Maria Cappello. The Cappellos are the registered proprietors of the property in Haberfield which was the subject of the Building Contract (the “Property”).

2. [2]

   The first defendant, Litigation Fund WCX Pty Ltd (“WCX”), has lodged a caveat over the Property asserting an interest said to arise under a deed entered into between WCX and the Cappellos dated 31 October 2023 (the “WCX Deed”). WCX, through its director Mr Coshott, advanced the principal submissions for why Homebuilding should not be granted the relief it seeks. In doing so, he relied upon written submissions signed by Mr Coshott, and written submissions signed by Mr Cappello and adopted by Mr Coshott on behalf of WCX. Maria Cappello did not appear at the hearing, but was served with Homebuilding’s amended summons and was copied on email communications with my chambers. For convenience, I address the submissions as advanced by WCX, mindful that they were adopted by Mr Cappello and would, if accepted, provide a basis for refusing relief against the Cappellos. In these reasons, I refer to WCX and Mr Cappello as the “active defendants”. Following a refinement of the issues at the hearing, the following questions arise:

   1. (1)

      Should Homebuilding be permitted to appear or advance its case?

   2. (2)

      Does Homebuilding have an effective charge arising under the Building Contract?

   3. (3)

      If the answer to question 2 is yes, should this Court grant relief under s 66G of the Conveyancing Act 1919 (NSW)?

   4. (4)

      Alternatively, if the answer to question 2 is yes, should this Court enforce the charge by ordering a judicial sale or appointing a receiver or receivers with a power of sale?

   5. (5)

      Should orders be made for the withdrawal of WCX’s caveat lodged in respect of the Property?

3. [3]

   Before addressing these issues, I set out the contractual context and relevant aspects of the procedural history.

Building Contract

1. [4]

   The Building Contract provided for building works to be carried out on the Property. The provision said to create a charge, cl 27, is as follows:

2. [5]

   The “owner” is the Cappellos. The “builder” is Homebuilding (previously named Hammond & Simonds NSW Pty Ltd). The “site” is defined as follows:

3. [6]

   The “land” is defined as follows:

4. [7]

   Homebuilding contends that amounts payable under the contract include costs associated with recovering or attempting to recover amounts under the contract, in reliance on cl 30, which was as follows:

5. [8]

   Clause 27 is clearly drafted with a view to giving effect to s 7D of the Home Building Act 1989 (NSW), which provides as follows:

6. [9]

   It was common ground before me that Homebuilding terminated the Building Contract. According to published reasons for a decision of this Court by Ball J (Cappello v Hammond & Simonds NSW Pty Ltd [2020] NSWSC 1021, “Justice Ball’s decision”) at [17], the date of this termination was 20 November 2018. Although Justice Ball’s decision and a number of other reasons for decision were tendered before me without objection, I received them subject to s 91 of the Evidence Act 1995 (NSW). I have only relied upon them as evidence of orders made or of facts which I can infer were not in issue before the court in question (such as the date of Homebuilding’s termination), or in order to understand, to the extent relevant, the issues that were raised in those proceedings.

7. [10]

   According to Justice Ball’s decision at [24], work had been completed under the Building Contract in October 2018.

Procedural history

1. [11]

   The history of the disputes between the parties is convoluted. It is not necessary to canvass all of it in these reasons, but I set out here some relevant features of the history.

2. [12]

   Litigation was commenced in this Court by the Cappellos in January 2019 claiming damages against both Homebuilding and Mr Re. At least by the time of the final hearing before Ball J, this included damages for alleged delay in completing the building works under the Building Contract, defects and alleged overcharging. Homebuilding cross-claimed for amounts unpaid under an invoice, and for work done before termination for which an invoice had not yet been issued.

3. [13]

   In Justice Ball’s decision, delivered 7 August 2020, his Honour gave judgment for Homebuilding in an amount of $76,510.68. That figure reflected the unpaid amount on the invoice that had been issued, reduced by the amount the Cappellos established by way of damages, with the addition of interest from the date the Building Contract was terminated.

4. [14]

   Justice Ball dismissed the proceedings against Mr Re.

5. [15]

   In a subsequent judgment, Ball J ordered that the Cappellos pay Homebuilding’s costs and Mr Re’s costs on an indemnity basis (the reason being that the Cappellos should have brought the proceedings in NCAT).

6. [16]

   On 1 March 2021, Homebuilding lodged its first caveat over the Property.

7. [17]

   On 14 April 2021, following appeal from Justice Ball’s decision, the Court of Appeal in Capello v Hammond & Simonds NSW Pty Ltd [2021] NSWCA 57:

   1. (1)

      allowed the appeal in part;

   2. (2)

      set aside the judgment for Homebuilding in the sum of $76,510.68 and in lieu thereof entered judgment for Homebuilding in the sum of $50,097.32;

   3. (3)

      ordered the Cappellos to pay 75% of respondents’ costs (ie both Homebuilding and Mr Re) of the appeal; and

   4. (4)

      otherwise dismissed the appeal.

8. [18]

   On the evidence before me, there was extensive litigation in the Local and District Courts, the Federal Court and this Court, in connection with the attempts by Homebuilding and Mr Re to enforce Homebuilding’s judgment and both plaintiffs’ favourable costs orders. I return to the costs assessments, certificates of determination and judgments in respect of these, which are important given the terms of cl 27 of the Building Contract and the issues before me.

9. [19]

   At some point after it was lodged, Homebuilding’s first caveat lapsed.

10. [20]

    On 28 March 2023, following a grant of leave by the Court of Appeal to lodge a further caveat, Homebuilding lodged a second caveat on the Property which remains on the register.

11. [21]

    The Cappellos and WCX executed the WCX Deed, apparently on 31 October 2023. Relevant terms of the WCX Deed are set out below, in the context of question 5.

12. [22]

    By mid-2024, Homebuilding had made a number of attempts to enforce the judgments which had been obtained against the Cappellos, including a District Court judgment in respect of Justice Ball’s indemnity costs order in an amount of $164,290.29. Homebuilding obtained a writ for levy of property in respect of goods at the Property and, it was submitted to me, a writ for levy of property in respect of the Property itself. Both writs were issued by the District Court. On 22 July 2024, WCX filed in the District Court a notice to sheriff of disputed property. The supporting affidavit by Mr Coshott included the following:

13. [23]

    On 9 May 2025, WCX lodged its caveat asserting an interest arising under the WCX Deed.

14. [24]

    On 27 May 2025, on the application of Homebuilding and Mr Re, the District Court renewed for 12 months a writ for levy of property that had been issued on 13 November 2023. While the plaintiffs did not tender the writ that was issued on 13 November 2023, the plaintiffs did tender the writ for levy of property issued three days later, on 30 May 2025. I was informed from the Bar Table that the plaintiffs had attempted to register this writ under s 105 of the Real Property Act, but that WCX’s caveat prevented it. While I take care about not receiving evidence from the Bar Table, I can readily accept the legal submission that the presence of WCX’s caveat creates a potential obstacle to registration of the writ having regard to the terms of s 105, especially s 105(3). Registration of the writ, and preparation of an affidavit verifying that and other matters, is one of the first steps that must be taken to enforce writs against land under Part 39, div 2 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’): see rr 39.21 and 39.22.

15. [25]

    On 15 July 2025, the plaintiffs commenced these proceedings against WCX seeking orders under s 74MA of the Real Property Act 1900 (NSW) for the withdrawal or lapsing of WCX’s caveat.

16. [26]

    On 28 July 2025, pursuant to leave granted on 18 July 2025, the plaintiffs filed their amended summons, which joined the Cappellos and sought relief including a declaration as to the alleged charge over the Property and orders for the sale of the Property.

17. [27]

    Following the hearing, and pursuant to orders I made providing for this to occur, the plaintiff sought leave to file a further amended summons making it clear that the relief sought for the sale of the Property included:

    1. (1)

       orders for judicial sale in this Court’s equitable jurisdiction;

    2. (2)

       orders for the appointment of receivers with a power of sale in this Court’s equitable jurisdiction; and

    3. (3)

       an injunction in this Court’s equitable jurisdiction requiring WCX to remove its caveat on the Property (in substantially the same terms as the order sought under s 74MA).

18. [28]

    On 23 December 2021, a costs assessor issued certificates of determination of costs (including costs of the assessment) in an amount of $159,978.69 in respect of Justice Ball’s indemnity costs order. Following an unsuccessful application for review of that assessment, on 1 April 2022, judgment was entered against the Cappellos in the District Court for $164,290.29 (including amounts for the costs of the review). This judgment is in favour of both Homebuilding and Mr Re.

19. [29]

    On 13 December 2021, a costs assessor issued a certificate of determination of costs in an amount of $32,994.13, plus assessor’s costs of $2,194.50 in respect of the Court of Appeal’s costs order. Following an unsuccessful application for review of that assessment, Homebuilding’s affidavit evidence indicates that judgment was entered on 1 April 2022 in the Local Court in an amount of $38,823.22. Again, the judgment is in favour of both Homebuilding and Mr Re.

20. [30]

    Homebuilding’s evidence establishes the following further judgments or certificates of costs:

    1. (1)

       on 6 September 2023, order for costs in the Local Court payable to Homebuilding by Mr Cappello in an amount of $1,155;

    2. (2)

       on 10 October 2023, taxed costs in the Federal Court payable to Homebuilding by the Cappellos in an amount of $40,638.53;

    3. (3)

       on 2 May 2024, certificate of determination of costs in an amount of $13,556.79 plus assessor’s costs of $940.50, in respect of a costs order made by the District Court on 9 July 2021 (payable to Homebuilding by the Cappellos);

    4. (4)

       on 19 August 2024, certificate of determination of review of costs (the original certificate of determination having been made on 2 May 2024) in an amount including assessor’s costs of $67,001.34, plus review costs in an amount of $4,295.50, in respect of costs orders made by the Court of Appeal on 28 March 2023 and 26 May 2023 (payable to Homebuilding and Mr Re by the Cappellos); and

    5. (5)

       on 7 March 2025, certificate of determination of costs in an amount of $24,466.54 plus assessor’s costs of $1,562, in respect of a costs order made by the Court of Appeal on 23 April 2024 (payable to Homebuilding and Mr Re by the Cappellos).

21. [31]

    It will be observed that some of these costs determinations are payable to Homebuilding alone and others are payable to both Homebuilding and Mr Re. I will return to this.

Question 1: Should Homebuilding be permitted to appear and advance its case?

1. [32]

   These proceedings were originally listed for hearing before Williams J for two days commencing 10 February 2026. Her Honour brought the parties before her on 9 February 2026 having identified that, according to the ASIC register, Homebuilding had been deregistered on 2 February 2026. On 10 February 2026, her Honour vacated the hearing date on the application of the second plaintiff Mr Re, to give Mr Re an opportunity to procure Homebuilding’s reinstatement.

2. [33]

   Homebuilding was in fact reinstated and the matter was listed for hearing (in due course assigned to me) on 19 March 2026.

3. [34]

   WCX contended that Homebuilding should not be permitted to appear on the basis of allegations – which I reject for the reasons I am about to state – that Mr Re had misled ASIC in his application for reinstatement. While WCX set these allegations out in “supplementary submissions” dated 17 March 2026, those submissions were not filed in advance of the hearing on 19 March 2026. There is no evidence of these submissions being sent to the plaintiffs in advance of the hearing. In those circumstances, the procedural unfairness of the way WCX raised the issue would be a sufficient reason to reject it.

4. [35]

   Further, such an assertion would provide no basis for refusing to hear from Homebuilding. Homebuilding has been reinstated and is registered as a corporation. There is no suggestion that there is any prospect of that reinstatement being revisited or unwound. As a registered corporation appearing through solicitors, Homebuilding is entitled to carry on this litigation.

5. [36]

   Given the gravity of the allegations, it is appropriate for me to observe also that the allegations were unsupported by the evidence advanced by WCX. Mr Re in his application for reinstatement confirmed that Homebuilding would be able to pay its debts as and when they fell due. WCX asserted – but did not prove by evidence – that Mr Re had previously attested on 11 August 2025 that Homebuilding could not pay its debts, with specific reference to a debt to the ATO. None of this proves that Mr Re misled ASIC, let alone that he made a false declaration (as was asserted by Mr Coshott on behalf of WCX).

6. [37]

   The answer to question 1 is yes.

Question 2: Does Homebuilding have an effective charge?

1. [38]

   It was common ground before me that, following a garnishee order, the judgment sum of $50,097.32 awarded by the Court of Appeal on 14 April 2021 had been paid. On the material before me, the other claimed debts that were the subject of an order by a court or tribunal (as required by cl 27) were the various costs orders or assessments summarised at [28] – [30] above.

2. [39]

   Clause 27 provides for a charge in respect of “all moneys that are or may become payable under this contract” (emphasis added). The basis for Homebuilding’s asserted charge is that cl 30 requires payment of “debt collection costs”, stated to include “any legal fees and costs associated with recovering or attempted recovery of an amount under this contract”. One issue for Homebuilding is that, as noted above, the Building Contract was terminated on 20 November 2018. There is no suggestion that any of the debt collection costs were incurred prior to this date. Clause 30 only creates an obligation under the Building Contract to pay debt collection costs if cl 30 survived termination of the Building Contract. While Homebuilding contended that it is simply seeking to enforce rights that had accrued as at the date of termination, I am unable to accept that. The rights which Homebuilding asserts could only accrue when the debt collection costs were incurred, and those debt collection costs only gave rise to rights “under” the contract if cl 30 survived termination.

3. [40]

   I accept Homebuilding’s submission as to the following matters (although they do not suffice alone for Homebuilding to succeed on this point):

   1. (1)

      Clause 27 in the Building Contract was not a mere agreement to grant a charge but constituted an immediate grant of an equitable charge: Danthanarayana v GR8 Constructions Pty Ltd (2012) 201 FCR 347 (‘Danthanarayana’) at [45] per Foster J.

   2. (2)

      This creates a security interest including in respect of money that may become payable later (at least, I would add, to the extent payment of such money is covered by the clause): Redman Construction Pty Ltd v Tarnap Pty Ltd (2005) 12 BPR 23,395; [2005] NSWSC 1011 at [27]-[30].

   3. (3)

      The termination of the contract does not cause the equitable charge to cease to have effect: Danthanarayana at [48]-[52].

4. [41]

   Plainly, therefore, cl 27 survives termination. However, this does not establish that the obligations in cl 30 survived termination. Clause 27 only secures the obligations which the clause says it secures. The obligations secured are, “moneys that are or may become payable under this contract” (emphasis added).

5. [42]

   For Homebuilding to succeed, it must establish that cl 30 survives termination, that is, that it “envisages a post-rescission state of affairs and is in no way abrogated by the termination of the contract”: Pearson Bridge (NSW) Pty Ltd v State Rail Authority of NSW [1982] 1 Aust Const LR 81 at 87. This is a question of construction: see, eg, One Pro Baulkham Hills Pty Ltd v Ming Tian Real Property Pty Ltd [2020] NSWSC 1043 at [95]; Ewing International LP v Ausbulk Ltd (No 2) [2009] SASC 381 at [289]. Contrary to Homebuilding’s submission, this does not turn on whether Homebuilding had accrued rights under the contract at the time of termination. As at the date of termination, Homebuilding did not have an accrued right to be paid any of the debt collection costs which are the subject of these proceedings. None of those costs had been incurred yet. Rather, the question, which is one of construction, is whether cl 30 survives termination in the sense that the contractual promise to pay debt collection costs continues even after the contract has been terminated.

6. [43]

   The Building Contract does not contain a clause stating that particular clauses survive termination. As it is a question of construction, it should be approached by asking what a reasonable person in the position of the parties would understand by the terms of the contract. While it is appropriate to take into account the commercial purpose of particular provisions, the best source for the ascertainment of the commercial purpose is the contract itself: The J&P Marlow (No 2) Pty Ltd v Hayes and McCabe (2023) 112 NSWLR 29 at [75]-[80] per Bell CJ. I take into account the commercial reality that debt collection costs are frequently incurred following termination of a contract, although that is not the only circumstance in which they arise. As a matter of coherence, it is difficult to see why debt collection costs prior to termination should be payable under cl 30 but debt collection costs after termination should not be payable under cl 30.

7. [44]

   More importantly, the overall structure of the Building Contract sheds light on the role of cl 30. Clauses 2 to 17 provide for the performance of the substance of the building work, including provision for progress payments, variations and extensions of time. Clauses 18 to 19 provide for practical completion and a final certificate. Clause 20 contains requirements for notices under the contract. Clause 21, which clearly post-dates practical completion, provides for a defects liability period. Clauses 22 and following provide for the consequences of breach or termination, including:

   1. (1)

      suspension by the builder if the owner is in breach (cl 22);

   2. (2)

      the consequences of the owner taking early possession, including the builder’s right to treat the actions as a repudiation, suspend the works or give a notice of default (cl 23); and

   3. (3)

      ending the contract for breach or for insolvency (cll 25 and 26 respectively).

8. [45]

   Clauses 26 and following have particular significance. Clause 26 provides as follows:

9. [46]

   The “cost of the building works” is defined in Schedule 2 and does not include debt collection costs. Homebuilding terminated the Building Contract for non-payment of an invoice, which is a ground for the builder to end the contract under cl 24. It follows that cl 26.1 applied, requiring the owner to pay either the costs in (a) to (d) or to pay (e) damages.

10. [47]

    Clause 26 is drafted in a manner which must survive termination, because it obliges the builder to make payments following termination, including damages. Further, it follows from cl 26.1(e) that if there is a termination under one of cll 14, 23, 24 or 25 that damages are payable “under” the contract. Clearly, amounts that are payable after termination are capable of being payable “under” the contract.

11. [48]

    Clause 27 survives termination, as I have indicated. Clauses 28 and 29, which provide for liquidated damages and interest on late payments, must survive termination. Next in the contract comes cl 30, which provides for debt collection costs, being costs that are frequently only incurred after the termination of a contract. And the next clause, cl 31, provides for dispute resolution and must reasonably be expected to survive termination.

12. [49]

    Clauses 32 and 33 provide for an allocation of risk and an indemnity for claims arising out of a cause or event at that party’s risk. This includes the situation where the owner takes early possession and must sensibly survive termination.

13. [50]

    The balance of the contract contains the kinds of clauses that one might expect to see at the end of a contract – insurance (cl 34), statutory warranties (cl 35), mandatory conditions arising under the Home Building Act (cl 36), assignment and subcontracting (cl 37), no waiver (cl 38) and severance of any illegal, void or unenforceable provision (cl 39).

14. [51]

    In other words, in the structure of the contract, cl 30 as well as cl 27 appear in the section dealing with circumstances that generally arise following termination of the contract for breach.

15. [52]

    Having regard to the commercial reality of a debt collection clause, the structure of the Building Contract and the context of the surrounding clauses, a reasonable person in the position of the parties would understand that cl 30 survived termination – that is, that the debt collection costs required to be paid under cl 30, which are secured under cl 27, include debt collection costs incurred after termination of the contract.

16. [53]

    I am accordingly satisfied that cl 27 secures debt collection costs even if those costs are incurred after termination of the Building Contract.

17. [54]

    WCX contends that the costs that have been assessed following an adverse costs order are still not the subject of an “order” of “a court or tribunal” within the meaning of cl 27.

18. [55]

    I do not accept this. As Kirk JA held in Cappello v Homebuilding Pty Ltd [2024] NSWCA 88 at [31]-[47], registered costs assessments are enforceable as though they are judgments of the relevant court. I am satisfied that cl 27 is engaged in circumstances where a court has made an adverse costs order against the Cappellos (thereby ordering the Cappellos to pay an amount as agreed or assessed) and where the costs have in fact been assessed by a determination that takes effect as though it is a judgment. I would read s 7D(3)(c) of the Home Building Act in the same way.

19. [56]

    WCX contends that, under cl 27, the charge is over “the site”, which is defined to mean “the locations on the land where building works are carried out”. WCX says “the site” must be only a portion of the land and that, therefore, there is no charge over the Property as a whole. WCX did not tender any documents to prove the extent of the building works or how much of the land they covered. Rather, WCX contended that it would be “beyond comprehension that the work would be carried out over every square inch of the land”, especially given that it is a renovation contract.

20. [57]

    I reject this argument. The Property – that is, the Cappellos’ bundle of rights as registered proprietors – is the only discrete piece of property that could sensibly be the subject of the charge. The land is described on page 1 of the Building Contract by reference to the Lot, DP number and Certificate of Title, as well as the street address. The Cappellos entered into the Building Contract as “owners” of that property. WCX’s contention that it would be “beyond comprehension” that the work would be carried out over every square inch only reinforces the conclusion that, on a sensible commercial interpretation, the charge is granted over the property of which the Cappellos are registered proprietors. That is how a reasonable person in the position of the parties would understand cl 27.

21. [58]

    While I am satisfied that there is an existing charge which is enforceable, there may be significant questions as to the precise quantum that is secured by the charge.

22. [59]

    Homebuilding has proceeded on the basis that costs orders made in favour of Homebuilding and Mr Re jointly are covered by the charge. That may be so, but I did not receive full argument on the issue.

23. [60]

    It is not necessary for me to reach a concluded view about this. At least some of the taxed or assessed costs are payable by the Cappellos to Homebuilding alone. On the evidence before me, those costs were associated with recovering or attempting to recover amounts claimed by Homebuilding. Given my conclusion that cl 30 survived termination, those amounts have become payable “under” the Building Contract. They are therefore the subject of the charge in cl 27.

24. [61]

    This suffices to grant declaratory relief, and to support consideration of questions 3 and 4.

25. [62]

    As to the form of the declaratory relief, the plaintiffs after the hearing advanced a proposed further amended summons on 13 April 2026 seeking relief in the following terms (underlining plaintiff’s document to reflect the change from the amended summons to the proposed further amended summons):

26. [63]

    The proposed addition of the words “to the plaintiffs” is surprising, given the plaintiffs’ acknowledgment during the hearing – an appropriate acknowledgment in my view – that Homebuilding is the only plaintiff with rights under the Building Contract. There is no basis for a declaration suggesting that money owing to the second plaintiff might be secured by any charge.

27. [64]

    I will hear further from the parties as to the form of a declaration, but I indicate that, subject to any further submissions, I am presently minded to make a declaration in the following terms:

Question 3: If the answer to question 2 is yes, should this Court grant relief under s 66G of the Conveyancing Act?

1. [65]

   As I indicate above, it is common ground that the answer to this question before me should be no. In light of the conclusion expressed by Bryson J in Australia & New Zealand Banking Group Ltd v Scott (1993) 6 BPR 13,217 at 13,221, section 66G is not available to a chargee of the whole of an estate in fee simple, even if that charge has been given by two or more co-owners who, between them, have 100% of the estate in fee simple.

2. [66]

   Homebuilding accepted that, as a first instance judge, I should follow this reasoning. Accordingly, the answer to question 3 is no.

Question 4: Should this Court enforce the charge by ordering a judicial sale or appointing a receiver or receivers with a power of sale?

1. [67]

   This relief was not sought expressly in the plaintiffs’ amended summons when the matter first came before me. However, the amended summons did seek the appointment of trustees for sale pursuant to s 66G or the Court’s “inherent jurisdiction”. The amended summons also sought “[s]uch further or other orders as the Court considers necessary”.

2. [68]

   The possibility of the appointment of receivers was adverted to in the plaintiffs’ written submissions dated 5 February 2026, which referred to the appointment of “trustees/receivers”. While an application for orders for judicial sale was not clearly articulated prior to the hearing, the plaintiffs did say in their written submissions that they sought orders for the “statutory sale” of the Property and orders in the Court’s inherent jurisdiction to aid the enforcement of its own judgments and orders.

3. [69]

   It is clear from Mr Cappello’s written submissions, which Mr Coshott adopted on behalf of WCX, that Mr Cappello understood that Homebuilding was asking that the sale of the Property be ordered in the Court’s “inherent jurisdiction”.

4. [70]

   At the hearing, after my chambers had drawn the parties’ attention to certain authorities, the plaintiffs confirmed that they sought orders for the appointment of receivers with a power of sale or orders for a judicial sale. Following the hearing, I made orders for the preparation and service of a draft further amended summons setting out the orders they sought for judicial sale or the appointment of receivers. The plaintiffs served (and sent to my chambers) a further amended summons seeking the appointment of receivers in the alternative to the appointment of trustees for sale. I infer from the absence of any separate prayer for a judicial sale that the plaintiffs seek the appointment of receivers and not orders for a judicial sale.

5. [71]

   The active defendants, by correspondence with my chambers dated 17 and 22 April 2026, opposed a grant of leave to file the further amended summons, contending that if leave were granted it would necessitate the reopening of the case to receive further evidence and make further submissions. I cannot accept this. During the hearing on 19 March 2026, I indicated that I was minded to rule on whether relief in the nature of judicial sale or the appointment of receivers should be ordered, and if so to hear the parties further on the form of the relief. The defendants did not oppose that course. I received argument about some matters orally during the hearing on 19 March 2026, and gave the active defendants an opportunity to prepare further written submissions including as to the appointment of receivers under s 67 of the Supreme Court Act.

6. [72]

   As to the form of the orders set out in the draft further amended summons, for the reasons that follow I do not propose to grant relief in that form. Accordingly, there is limited utility in granting leave to file the draft further amended summons in its current form. The plaintiffs confirmed during oral argument on 19 March 2026 that they relied on the existing prayer in the amended summons for “[s]uch further or other orders as the Court considers necessary”. I am satisfied that it is fair to proceed on the basis of that prayer. As I indicate below, I am satisfied that it is appropriate to make orders for the appointment of a receiver or receivers and I will receive further argument on 18 May 2026 as to the appropriate form of orders.

7. [73]

   The sources of power on which the plaintiffs rely for the appointment of receivers are as follows (underlining in plaintiffs’ document to reflect the change from the amended summons to the proposed further amended summons):

8. [74]

   The active defendants contend that the Court has no “inherent jurisdiction” to appoint receivers or make orders for judicial sale. The active defendants rely on a number of authorities for the proposition that the inherent jurisdiction “is limited to assisting powers which the Court otherwise has”: State of New South Wales v Hollingsworth [2023] NSWCA 152 at [90]-[92]; McGuirk v University of NSW [2010] NSWCA 104 at [176]-[186]; Commissioner of Corrective Services v Liristis (2018) 98 NSWLR 113 at [12]-[18]. Those authorities may be accepted, although they do not support the active defendants’ contention that this Court’s jurisdiction is confined to powers conferred by statute or to a jurisdiction to make orders to “assist” in relation to statutory powers.

9. [75]

   While the plaintiffs also rely on s 23 of the Supreme Court Act, the scope of s 23 is a matter warranting some care having regard to the observations of the Court of Appeal in cases like McGuirk v University of NSW and Commissioner of Corrective Services v Liristis. It is not necessary in this case to rule on the metes and bounds of s 23 of the Supreme Court Act. This Court’s equitable jurisdiction has a source in statute: see ss 57 to 63 of the Supreme Court Act. These provisions pick up a substantial body of law that is not derived (at least not entirely or directly) from Acts of Parliament – including as a general matter power to grant relief that could (or ought to) have been “given by a court of equity”.

10. [76]

    I am satisfied that a prayer for relief relying on the Court’s “inherent jurisdiction” (as appears in the amended summons) is adequate to put a party on notice that the Court’s equitable jurisdiction may be invoked, including a jurisdiction which is statutory only in the sense that it relies on the conferral by the Supreme Court Act of the jurisdiction of courts of equity. The plaintiffs’ proposed amendment in the draft further amended summons (to refer to the Court’s “inherent equitable jurisdiction”) raises questions it is unnecessary to resolve about the overlap and relationship between this Court’s inherent jurisdiction and its equitable jurisdiction. While it is important for legal representatives to give careful thought to the nature of the Court’s jurisdiction sought to be invoked in a given case, I would not withhold relief on the basis of the active defendants’ complaint about the labelling of the jurisdiction in this case.

11. [77]

    The principal right pursuant to an equitable charge is “a right of realisation by judicial process, that is to say, by the appointment of a receiver or an order for sale”: Swiss Bank Corporation v Lloyd’s Bank Ltd [1982] AC 584 at 595. In Morris Finance Ltd v Brown (2017) 252 FCR 557 at [38]-[39], the Full Federal Court said:

12. [78]

    In Property Investors Alliance Pty Ltd v C88 Project Pty Ltd (2023) 21 BPR 44,483; [2023] NSWCA 291 at [75]-[77], White JA (Kirk JA and Griffiths AJA agreeing) affirmed that the remedies for an equitable charge are a judicial process for the appointment of a receiver or for judicial sale.

13. [79]

    Homebuilding by its proposed further amended summons presses for the appointment of receivers. The active defendants made no submissions suggesting that, if a remedy is to be granted to enforce Homebuilding’s equitable charge, that remedy should be an order for judicial sale rather than an order for the appointment of a receiver or receivers.

14. [80]

    In many cases involving the enforcement of an equitable charge over land, an order for judicial sale may be the appropriate order. In such cases, the Court may give the conduct of the sale to whichever party has the greatest interest in maximising the sale price (see, eg, Sood v Christianos (2008) 14 BPR 26,101; [2008] NSWSC 1087 at [23] per Brereton J) or the Court may give the conduct of the sale to a third party (see rule 27.2(2) of the UCPR). However, there are sound reasons why, in some cases, it is preferable to appoint a receiver or receivers rather than order judicial sale at the hands of a chargee, a chargor or even a third party. The special responsibilities of receivers, and their regulation by the Court, provide one reason. Another is the experience that receivers might be expected to have – and that the proposed receivers have in this case – in relation to sales of the relevant kind. That expertise operates to the benefit of both Homebuilding as chargee and the second and third defendants as owners of the property.

15. [81]

    In light of the history of disputation between the parties, I accept that it is preferable for an independent third party or third parties (themselves officers of the Court and subject to the Court’s supervision) to be appointed to take possession and control of the Property, and to effect its sale. It would not be sufficient simply to order that an independent third party have conduct of the sale under rule 27.2(2) of the UCPR, which may leave scope for unnecessary dispute about what is entailed in “the conduct” of a sale of property within the meaning of that sub-rule.

16. [82]

    As indicated above, Homebuilding relies on this Court’s “inherent” or “inherent equitable” jurisdiction and its express statutory power to order the appointment of receivers in s 67 of the Supreme Court Act.

17. [83]

    The active defendants contend that s 67 is limited to interlocutory orders to preserve property pending the determination of a dispute between the parties. I do not accept that s 67 is so limited. The authorities about the appointment of receivers rather confirm that the Court’s power to appoint a receiver is not an end in itself, but is exercised in aid of some other power or right, and is “ordinarily” interlocutory: see, eg, David & Ros Carr Holdings Pty Ltd v Ritossa (2025) 117 NSWLR 528 at [246]-[247]. So much may be accepted. The important point Leeming JA stressed in Ritossa at [245] is that one cannot achieve what otherwise cannot be achieved “powered by the back door through the appointment of a receiver”. That is not occurring in this case.

18. [84]

    The existence of an equitable charge gives this Court power in its equitable jurisdiction to order a judicial sale. The appointment of receivers in this case is a remedy to effect that same sale at the hands of independent officers – the receivers – who owe duties to the Court. As I indicate above, the appointment of receivers with a power of sale is a well-recognised remedy to enforce an equitable charge. I reject the active defendants’ contentions that the Court’s power to appoint receivers is not enlivened in the circumstances of this case.

19. [85]

    In the proposed further amended summons, the plaintiffs simply seek the same orders sought under s 66G of the Conveyancing Act, save that the prayers refer to the proposed “trustees or receivers”. It is not obvious to me that the plaintiffs have given any careful consideration to whether orders for the appointment of receivers should be in any different form from orders for the appointment of trustees for sale under s 66G of the Conveyancing Act.

20. [86]

    For example, the plaintiffs propose an order that the Property should vest in the receivers. I cannot see the basis for that order – such an order is an appropriate order for a trustee for sale but not for a receiver.

21. [87]

    It is not obvious why the plaintiff seeks the appointment of two receivers. There may be a reason for this – in appropriate cases there are sound practical reasons for the appointment of more than one receiver – but Homebuilding has not explained what that reason might be in this case.

22. [88]

    The proposed orders do not state what powers are being conferred on the receivers. Implicit in some of the orders sought by the plaintiffs is that the powers should include the power to enter into possession of the property and take control of it, and a power of sale of the Property – perhaps accompanied by the power to do all things necessary or convenient to effect the sale. I do not know whether the proposed receivers say they should have particular powers in order to perform their function appropriately. In identifying some powers that may be appropriate in the present case, I should not be understood to be giving an exhaustive list. The Court is entitled to expect a party seeking the appointment of receivers to give careful consideration to what powers are appropriate and to assist the Court in relation to the terms of appointment generally.

23. [89]

    While the evidence includes affidavits from the proposed receivers consenting to an appointment as trustees for sale, the deponents have not in terms consented to being appointed as receivers. The scope of the duties in such roles is not identical and the individuals’ consent may depend on the anticipated powers that may be conferred. I would not be minded to act merely on the fact of their consent to appointment as trustees.

24. [90]

    While the orders assume that the receivers will have costs or expenses, the orders make no provision in relation to the remuneration of the receivers (pursuant to rule 26.4 of the UCPR or otherwise).

25. [91]

    Although I raised with the parties during the hearing before me the question whether receivers should be appointed with or without security, the plaintiffs did not address this in their proposed orders or in the written submissions that accompanied those orders. I am conscious of commentary indicating that an appointment will typically be made without security where an appointee is an appropriately insured registered liquidator. The two proposed receivers are registered liquidators, although I have no direct evidence as to their insurance position.

26. [92]

    The plaintiffs seek orders for the proceeds of sale to be paid in the following order:

27. [93]

    The payment in subparagraph (a) is appropriate. I am not prepared to make the order in subparagraph (b). As I have stated above, the plaintiffs’ evidence does not enable a clear conclusion to be reached as to the quantum secured by the plaintiffs’ equitable charge. I will order the payment of the costs and expenses of sale (including the costs and expenses of the receiver or receivers) and then order that the balance be paid into Court.

28. [94]

    As is clear from the foregoing, the plaintiffs have not put the Court in a position to make final orders for the appointment of a receiver or receivers. In fairness, this possibility was canvassed at the hearing before me, as explained at [72] above. Especially in light of the form of the plaintiffs’ draft further amended summons sent to my chambers on 13 April 2026, this is the appropriate course.

29. [95]

    The matter presently has a return date before me on 18 May 2026. I will receive further submissions from the parties on that date as to the form of orders for the appointment of a receiver or receivers. I put the parties on notice now that I expect them to take appropriate steps to enable the Court to consider a proposed form of orders, or competing forms of order, for the appointment of a receiver or receivers on that day.

30. [96]

    The answer to question 4 is yes. The form of orders will be the subject of a further hearing on 18 May 2026.

Question 5: Should orders be made for the withdrawal of WCX’s caveat?

1. [97]

   Section 74MA of the Real Property Act only permits a person “who is or claims to be entitled to an estate or interest in the land” to apply to the Supreme Court for an order that the caveat be withdrawn.

2. [98]

   In light of my answer to question 2, Homebuilding is a person who is entitled to an interest in the land, by reason of its equitable charge to secure debt collection costs.

3. [99]

   WCX accepted that if Homebuilding had a valid equitable charge, Homebuilding’s charge took priority over any interest WCX acquired under the WCX Deed. That concession was appropriate given that Homebuilding’s charge was earlier in time and there is no reason to postpone Homebuilding’s interest.

4. [100]

   I do not accept WCX’s contention that, even if Homebuilding has a valid charge which takes priority over WCX’s asserted charge, it would be unnecessary to make orders under s 74MA. The evidence does not enable me to have any confidence that WCX will take steps for the removal of the caveat merely because this Court holds that Homebuilding has a valid equitable charge and that it should be enforced by orders requiring the sale of the Property. I am satisfied that the interests of justice warrant orders under s 74MA of the Real Property Act to ensure that WCX’s caveat does not hinder the proposed sale.

5. [101]

   I accept Homebuilding’s contention that the WCX Deed does not give WCX an immediate security interest in the Property. The hearing before me was a final hearing, and I made it clear to the parties that, provided Homebuilding had standing to seek the relief, the Court was called upon to determine on a final basis as between the parties the question whether the WCX Deed created a present security interest.

6. [102]

   I have concluded that it does not.

7. [103]

   The WCX Deed provides for the advance of up to $500,000 to the Cappellos and its repayment with interest. The WCX Deed permits the Cappellos to repay the advance at any time “during the term of the advance” and provides that the unpaid amount plus interest must be paid on or before 31 October 2028.

8. [104]

   Clause 2 of the WCX Deed provides that:

9. [105]

   The recital to the Deed makes it clear that the charge is to be “over all their assets, both real and personal and both joint and several”. Pursuant to cl 3, the WCX Deed does not require repayment of any advance until 31 October 2028.

10. [106]

    The question is whether this creates an immediate proprietary interest in all the Cappellos’ assets, both real and personal (as WCX contended), or whether the security interest only crystallises if, after the end of the term on 31 October 2028, the principal and interest remain unpaid.

11. [107]

    Clause 2 provides that the Cappellos “hereby” secured the advance and interest by way of a charge. While I accept that this is suggestive of an immediately enforceable charge, there are other features of the WCX Deed and its context which make this inherently unlikely. First, the charge could not arise “hereby”, that is by execution of the Deed – at the time of execution no funds had been advanced.

12. [108]

    More importantly, the clause applies to all assets, real or personal. It would be inherently surprising for two private individuals to give an immediately enforceable charge over all their personal property as well as their real property. This is especially so in respect of an advance for a term of five years, expiring 31 October 2028. This would prevent them from disposing of any of their personal property (including, it would appear to me, spending money from their bank accounts, selling goods or even making gifts to third parties) without WCX’s consent.

13. [109]

    This feature of the WCX Deed makes it materially different from other charges given over all of a person’s real property. Furthermore, the advance is to the Cappellos personally, and not in the context of any business. Accordingly, there is no scope to read down the charge so that it permits dealing with assets in the ordinary course of business, as some floating charges might operate.

14. [110]

    A charge which prima facie appears to be fixed may be construed as floating because of the context in which the charge has been granted, including if a fixed charge would make the carrying on of business difficult or impossible: Boambee Bay Pty Ltd v Equus Financial Services Pty Ltd (1991) 26 NSWLR 284. To move away from the labels “fixed” and “floating”, which may not be useful and may serve to distract, it is a matter of construction whether a charge creates an immediate proprietary interest in property, and this may be informed by the context and the practicability of competing interpretations. As the Full Federal Court observed in Bowesco Pty Ltd v Zohar (2007) 156 FCR 129 at [83], in seeking to discern the contractual intention of the parties to a charge, each case is to be dealt with according to its own facts.

15. [111]

    Given the impracticability of a charge preventing the Cappellos from dealing with all of their real and personal assets from the date of the WCX Deed or from the date of the first advance, the alternative approach which is grounded in the text is to recognise the significance of the repayment date in the last clause of the WCX Deed. A practical interpretation – providing for an extensive security interest but in a practicably workable manner – is that the charge qua security interest attaches to property upon the expiry of the term, if any amount is unpaid at that time.

16. [112]

    It is not necessary for me to address the question, in respect of which Campbell J recognised divided authority in Hanson Construction Materials v Vimwise Civil Engineering (2005) 12 BPR 23,355; [2005] NSWSC 880 at [15], about whether as a general proposition a floating charge should be regarded as attaching to the property at all before it crystallises (if indeed that is a useful question to ask in any sense divorced from the particular terms of a particular charge – a matter about which I offer no opinion).

17. [113]

    Adopting a sensible construction of the WCX Deed, mindful of its context, I am satisfied that a reasonable person in the position of the parties would not regard WCX as having any right in relation to any particular piece of the Cappellos’ property prior to the expiry of the term of the WCX Deed on 31 October 2028.

18. [114]

    It follows that WCX does not have an interest in the Property capable of supporting the caveat.

19. [115]

    If, contrary to my answer to question 2 above, Homebuilding did not have a currently enforceable charge, I would still consider it appropriate to grant an injunction ordering WCX to remove its caveat.

20. [116]

    If Homebuilding did not have a currently enforceable charge, then it would not be entitled to an estate or interest in the land and therefore would not have standing under s 74MA. The plaintiffs rely, if necessary, on Nguyen v Sage Consultant Group Pty Ltd (2021) 20 BPR 41,989; [2021] NSWSC 753, in which Robb J held that, if there has been a final hearing about the claimed proprietary interests, relief equivalent to s 74MA can be given in this Court’s equitable jurisdiction: at [387]-[397]. The circumstances of that case were similar to the present – a creditor sought the removal of a caveat to enable the registration of a writ with a view to enforcing the writ against the land.

21. [117]

    In the present case, if Homebuilding did not have a valid charge and therefore did not have standing under s 74MA, this Court would nevertheless have had power to grant an injunction requiring the removal of the caveat. In light of my conclusion that WCX does not have a caveatable interest, it would have been appropriate to grant such an injunction in the present case, even if I were not persuaded to grant the relief that follows from my favourable answers to questions 2 and 4 above.

22. [118]

    The answer to question 5 is yes. The order for the removal of the caveat should be made pursuant to s 74MA of the Real Property Act.

Conclusion and orders

1. [119]

   It follows that the Court should grant the order sought under s 74MA of the Real Property Act. The Court should also make directions in relation to the outstanding issue regarding the form of declaratory relief and the appointment of receivers.

2. [120]

   I make the following orders:

   1. (1)

      Pursuant to s 74MA of the Real Property Act 1900 (NSW), order the first defendant to withdraw caveat AV48870 as lodged in respect of folio identifier 10/1247934, being the land situated at 39 Empire Street, Haberfield NSW, by 5pm on 5 May 2026.

   2. (2)

      Direct the plaintiffs by 6 May 2026 to file, serve and send to my chambers:

   3. (3)

      Direct the second and third defendants by 13 May 2026 to file, serve and send to my chambers any competing form of order for the appointment of receivers or declaratory relief.