Author: baron + associates

A caveat can be removed by court order if it lacks any proper basis or fails to include the prescribed particulars. However, a recent Supreme Court decision reveals that sometimes the removal of a caveat is only the starting point. Here, the Court went further, using its discretionary powers to manage ongoing disputes and minimise future conflict between the parties.

Under the Real Property Act 1900 (NSW), a caveator must specify the legal or equitable interest claimed (s 74F) and provide the prescribed particulars under the Real Property Regulation 2019 (NSW). Further, the Court may only extend a caveat if satisfied the claim “has or may have substance” (s 74K).

In Al-Jaradat v Ghunmat [2025] NSWSC 1283, a husband lodged a caveat over a jointly owned property following a dispute about the sale process agreed in a financial settlement. Justice Slattery ordered the removal of the caveat because it “suffer[ed] from a material misdescription of substance” and lacked sufficient particulars. Importantly, the Court then imposed several conditions to protect the parties’ interests. To safeguard the husband’s interests, these conditions included giving him security over a replacement property or, alternatively, quarantining part of the sale proceeds to compensate him for the amount in dispute. The Court also directed an expedited costs assessment.

In this case, costs were awarded against the caveators, and the Court exercised its discretion to prevent further disputes, highlighting that caveat litigation does not always only end with removal.

Providing a builder with the opportunity to address defects is often a practical way for owners and contractors to minimise loss. Crucially, the recent case of Ceerose Pty Ltd v The Owners – Strata Plan No 89074 (‘The Owners‘) [2025] NSWCA 235 reveals that this is not an absolute obligation. 

This case concerned disputes over alleged defects following the completion of a residential apartment building in Sydney. The NSW Court of Appeal held that there is no positive duty on an owner to provide the builder with an opportunity to rectify defects. Rather, it is the builders’ responsibility to show that the owner’s choice to engage a replacement contractor was unreasonable. The Owners had raised concerns over several years about the builder’s ability and willingness to repair the defects. Since prolonged negotiations had stalled, the Court found no basis to conclude that appointing a new builder was unreasonable.

This case shows that if an owner can prove the builder was given an opportunity to fix defects but failed to do so, it can strengthen the owner’s claim to recover the cost of rectification. Conversely, the failure to do so can significantly reduce damages if unnecessary additional expense is incurred by engaging a replacement builder.

The case of Delaney Advertising & Media Pty Ltd v Upper Hunter Solar Pty Ltd [2025] NSWSC 1321 involved Mr Williams, the director of a company planning to develop a solar farm in the Hunter Valley, NSW, who had personally guaranteed a $3 million loan taken out by the company. The company ultimately failed to repay the loan and the lender sold the land used as security and sought to recover the remaining debt.

Mr Williams attempted to avoid liability on several grounds. First, he claimed that he would only be liable after other guarantors had been called upon, based on a verbal conversation he described. The Court rejected this, finding his account contradicted by contemporaneous documents. It also noted that his evidence was unreliable, pointing out his false claim of not having received independent legal advice, despite a certificate proving otherwise.

He further argued that he was not liable under the guarantee because it referred to a different loan document than the one the lender actually used, invoking the legal principle that ambiguities between a loan and its guarantee should be interpreted in favor of the guarantor. The Court dismissed this, finding no real doubt that the guarantee clearly applied to the loan provided by the lender.

Finally, Mr Williams contended that the notice of demand was invalid because it required payment in 21 days instead of the 30 days specified in the agreement. The Court held that, despite this technical error, the lender had demonstrated it suffered loss due to the failure to repay the loan, so he remained liable.

Overall, this case underscores the importance of fully understanding guarantees and loan obligations, as courts will enforce them strictly, and technical defenses are unlikely to relieve a guarantor from liability.

A recent decision of the Supreme Court of New South Wales clarified the binding effect of contract dates and the restrictions on reclaiming deposits when a property sale does not go ahead. Justice Pike’s judgment confirms that the buyer carries the risk of settlement delays and cannot assume automatic return of their deposit.

In Grubisa v Zhou [2025] NSWSC 942, the dispute concerned the sale of a property at Brighton Drive, Bella Vista, NSW. In this case, settlement was required within a set period from the contract date, but the buyer was unable to complete on time. The seller issued a notice to complete and later sought to terminate the contract. The buyer initially sought to enforce the sale and lodged caveats on the property but eventually abandoned that claim and requested the return of the deposit.

The central issue was when the contract became legally binding: the seller argued it was upon the exchange of contracts, while the buyer claimed it only became binding once the deposit bond and statutory certificate were provided. The buyer also sought the return of the deposit under s 55(2A) of the Conveyancing Act 1919 (NSW), arguing it would be unfair for the seller to retain the deposit given that the property had been resold at a higher price and rented out in the meantime.

The Court held that a binding agreement was formed when the contracts were exchanged, regardless of when the deposit documentation or statutory certificates were finalized. It also found that the deposit still functioned as a guarantee for performance, and there was no unfairness sufficient to justify its return.

Accordingly, the buyer’s claim was dismissed, and the seller was entitled to retain the deposit.

Key Takeaways:

• The contract date is determined by the exchange of executed documents, not subsequent actions such as provision of a deposit or certificates.
• A deposit functions as a security for performance and will generally not be returned unless it is clearly unjust or inequitable.
• Parties must ensure timely compliance with settlement obligations and understand that delays in securing funding do not automatically invalidate termination notices.

In Alamdo Holdings Pty Ltd v Reece Australia Pty Ltd [2025] NSWSC 946, the Supreme Court of New South Wales affirmed that a party cannot rely on its own breach to terminate a lease. The Court emphasised that this principle is not confined to leases, but applies broadly across all contractual arrangements.

In this case, Alamdo Holdings Pty Ltd (‘Alamdo’) leased commercial premises to Reece Australia Pty Ltd (‘Reece’). Under the lease, Reece was required to secure development approval and an occupation certificate before utilising the premises for its business. Under Article 29(9) of the lease, either party had the right to terminate the lease if the occupation certificate was not issued within six months from the commencement of the lease.

When the certificate had not been granted in this timeframe, Reece attempted to terminate the lease. Alamdo disputed this, arguing that the delay was largely caused by Reece’s own mismanagement of the approval process, including its slow response to Council requests for information, missed payment deadlines, and provision of incomplete or deficient documentation to the Council. Reece argued that it was entitled to terminate regardless of fault, and also raised Alamdo’s outstanding fire safety works as a contributing factor to the delay. 

The Court rejected Reece’s arguments, finding that its failures played a significant role in the delay. The minor outstanding fire safety works on Alamdo’s part did not prevent the Council from processing the development application, so Reece could not claim they were responsible. Accordingly, Reece was not entitled to rely on the termination clause and the lease remained in force. 

This case serves as a clear reminder that a party cannot terminate a contract when its own conduct significantly contributes to the breach. Strict adherence to contractual obligations and procedural requirements is essential, and parties should carefully consider their role in any delay before attempting to rely on a termination right.

In Transport for NSW v Hunt Leather Pty Ltd; Hunt Leather Pty Ltd v Transport for NSW [2024] NSWCA 227, Sydney CBD business owners along the Sydney Light Rail corridor commenced representative proceedings against Transport for NSW (‘TfNSW‘), alleging that extended construction works – including noise, dust, vibration and restricted access – substantially interfered with their use and enjoyment of land and caused financial loss. The decision provides important clarification of private nuisance principles in the context of major infrastructure projects.

At first instance, the Supreme Court found TfNSW liable in private nuisance for delays beyond an amended construction timetable and awarded damages to some plaintiffs. However, it refused to allow recovery of a 40% litigation funding commission as damages. TfNSW appealed the nuisance finding, and the plaintiffs cross-appealed on the funding issue.

The Court of Appeal unanimously allowed TfNSW’s appeal and overturned the finding of nuisance. It held that the plaintiffs failed to prove that the construction delays amounted to a substantial and unreasonable interference. In particular, the Court held that TfNSW’s Initial Delivery Program could not be treated as a reliable benchmark for unreasonableness, as it could not fully account for practical contingencies such as weather conditions and the discovery of underground utilities. As such, the Court emphasised that construction authorised by statute does not become actionable nuisance merely because it exceeds projected timeframes. In this case, there was insufficient evidence to establish that the actual duration of works, given the complexity of the project and the unknown utilities encountered, was legally unreasonable.

Moreover, the Court dismissed the cross-appeal, confirming that litigation funding commissions are not recoverable as damages. Entering into a funding agreement was a voluntary commercial decision and not a loss caused by any alleged nuisance.

Ultimately, this decision underscores that project delays alone do not establish nuisance. Claimants must demonstrate, with clear evidence, that the interference was substantial and unreasonable in the circumstances. It also reinforces limits on recoverable damages in large-scale infrastructure disputes, particularly in relation to litigation funding costs.