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Air Prop Pty Ltd v Ilend Capital Pty Ltd [2021] NSWSC 1134 (7 September 2021)

Last Updated: 7 September 2021

JUDGMENT

1 The plaintiff commenced these proceedings by Summons on 26 July 2021, seeking removal of the defendant’s caveat in relation to a property in North Kellyville. The plaintiff was in the process of purchasing the property pursuant to a contract for sale. When the Summons was first heard on 29 July 2021, the defendant informed the Court that the caveat had already been withdrawn.

2 These reasons address the outstanding issue of costs. The plaintiff seeks costs on the indemnity basis. It relies on written submissions dated 23 August 2021. The defendant seeks no specific order as to costs. It relies on written submissions dated 19 August 2021.

3 The defendant’s caveat claimed an interest of an estate in fee simple by virtue of an agreement between the defendant and the registered proprietor of the land, KPI Hezlett Pty Limited. There is no evidence of any such agreement. There is no serious question to be tried as to the existence of such an interest. It seems that the defendant may have intended to rely on a Mandate Agreement between it and the plaintiff. However, that agreement contemplates a charge, not the transfer of an estate in fee simple. Moreover, it would not, on its true construction, give rise to any charge before the plaintiff completed the contract for sale.

4 Had the defendant acted reasonably, it would have withdrawn the defective caveat when the plaintiff requested, prior to the commencement of the proceedings. After the Summons was filed, the defendant promptly withdrew its caveat. This should be regarded as a capitulation. The defendant’s unreasonable conduct warrants a costs order against it on the indemnity basis. The Court will make an order to that effect, along with an order dismissing the proceedings.

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