Sama Zaraah Pty Ltd v 888 Projects Pty Ltd

I have before me a summons for an order extending the operation of a caveat until further order of the court. The caveat describes the estate or interest in the land claimed as an equitable interest as transferee of the land. The instrument by which that equitable estate is said to arise is described as an option deed of 5 June 2007.

The option deed grants an option to purchase two lots in a proposed subdivision. The plan of subdivision has not been registered. The caveat is claimed over those prospective lots.

In Forder & Ors v Cemcorp Pty Ltd [2001] NSWSC 281, Barrett J had to consider a situation in which a caveat was lodged over the entirety of unsubdivided land in which an equitable interest was claimed by virtue of a put and call option between the registered proprietor of the land and the caveator in respect of a proposed lot in a proposed subdivision of the land.

That was a situation different from the current caveat that asserts an interest in prospective lots 1 and 9 in the prospective subdivision. In circumstances such as this, Hely J in Harrison v Lidoform Pty Ltd, unreported, FCA, 24 November 1998, said: “ The fundamental flaw in the applicant's argument, in my view, is that any personal equity to be offered a substituted lot only becomes a proprietary interest when it attaches to an identifiable lot. There is no proprietary right or interest in the whole at the point at which there is merely a personal obligation on the vendor to select a part and to make an offer of it. Beneficial Finance v Multiplex Constructions Pty Ltd (1995) 36 NSWLR 510,524 supports this conclusion.”

With that proposition, Barrett J agreed in Forder at [15] . I respectfully agree with the approach. The caveat is bad.

Reference was made to the Real Property Act 1900 s 74L which provides: “If in any legal proceedings a question arises as to the validity of a caveat lodged under a provision of this Part, the court shall disregard any failure of the caveator to comply strictly with the requirements of this Part, and of any regulations made for the purposes of this Part, with respect to the form of the caveat.” It was submitted that the provision applied in the instant circumstances.

In my view, the section only applies to defects of form and does not deal with matters of substance. It does not empower the court to amend the provisions defining the interest claimed ( Depsun Pty Ltd v Tahore Holdings Pty Ltd (1990) 5 BPR 97,352). In my view the caveat is bad in substance and not merely in form. To make it good would require an amendment to the provisions defining the interest claimed.

The caveat is not protected by the Real Property Act 1900 s 74L and I dismiss the summons. I order the plaintiff to pay the defendant’s costs.