Author: baron + associates

In Coopharpash Pty Ltd v Carroll [2017] NSWSC 1386, Mr Collins agreed to lend Mr Carroll $185,000 out of his superfund. The Coopharpash company was the trustee of the superfund. To secure payment, Mr Collins lodged a caveat in his name over Mr Carroll’s property. The Supreme Court refused to extend the caveat. Justice Kunc said that the caveat was bad on its face, because it did not set out the facts by virtue of which Mr Collins claimed to have an interest. Additionally, the agreement to loan the money was between the company and Mr Carrol, with the company in the position of lendor. Consequently, the company was the one in the position to caveat, not Mr Collins. The Supreme Court allowed the caveat to lapse.

Tamanna v Zattere; Thakorlal v Zattere; Rabac Pty Ltd v Zattere [2017] NSWSC 1388

The owners of a five acre property proposed to subdivide the lot, and purchasers entered into contracts of sale for those subdivided lots. The sales were conditional on the registration of the plan of sub-division, and the vendors were required to use reasonable endeavours to have it registered by a certain date. The plans were not registered, and the purchasers claimed damages for loss of bargain.

The Supreme Court said that the ‘reasonable endeavours’ required planning and preparation. The purchaser entered into lengthy negotiations with neighbours regarding access to their property, but beyond this took no action aimed at achieving registration. The Court said that this was a breach of the reasonable endeavours obligation under the contract. The Court refused to lower the expectation of reasonable endeavours by reason of the purchaser’s inexperience with property transactions, noting that professional help was available to them at all material times.

Loss of bargain damages were awarded to the purchaser because if there had not been a breach of the obligation to make reasonable endeavours, there was at least a substantial chance that registration would have occurred by the deadline.

Samowill Pty Ltd v Queanbeyan – Palerang Regional Council; Samowill Pty Ltd v Heritage Council of New South Wales [2017] NSWLEC 1550

Braidwood is heritage listed town famous for its well preserved colonial architecture. The Samowill company sought approval from the Council to subdivide a rural lot into five residential blocks. The Council refused the application because it would have a detrimental impact on the heritage listed town. The Court upheld the Council’s decision, taking into consideration factors unique to the site. The Commissioner highlighted that the modern site would be visible during arrival to the town, and that the uninterrupted transition from heritage building to unused land was important for the colonial style landscape. Taking these factors into consideration, the development would have an adverse impact on heritage significance.

In the matter of Plutus Payroll Pty Limited & others [2017] NSWSC 1360, the Plaintiff Deputy Commissioner alleged that twelve companies participated in a syndicate for the purpose of avoiding large tax obligations to the Commonwealth. The companies were unable to pay their tax liabilities, and the Commissioner applied for the companies to be wound up for insolvency under s459P of the Corporations Act.

A corporation is not solvent unless it is able to pay all its debts when they become due and payable. A company’s failure to pay a particular debt may by itself be sufficient evidence of insolvency, unless that debt is disputed. None of the defendants have disputed the debt they owe to the Commonwealth, and the debts are substantial, ranging from $1.6 million $54.7 million. Additionally, eight of the twelve defendants have outstanding unpaid obligations to employees for wages and superannuation. Brereton J concluded that each of the defendants were insolvent, and ought to be wound up.

The NSW Supreme Court addressed this question in Yeshiva Synagogue Incorporated 9893834 v Karimbla Properties (No 10) Pty Ltd [2017] NSWSC 1368. Land owned by Karimbla was leased to the “Yeshiva Centre”, which consisted of the Yeshiva Synagogue, two colleges, and a charitable kitchen. To raise money, Karimbla sold the land to a purchaser subject to existing tenancies, and when the leases expired the new purchaser refused to renew them. Yeshiva Synagogue argued that a clause in the Deed of Agreement for the continued use and occupation of the land gave rise to an ongoing right of possession even after the termination of the lease.

Justice Darke determined that the object of the sale of land by Karimbla was to raise money to facilitate the continued operation of the Yeshiva Centre. Nonetheless, the language in the agreements did not indicate that the plaintiffs were to be given a right of possession following the termination of the leases. A reasonable business person would have read the terms as meaning that upon termination of the leases, the owner would have a right to sell the premises with vacant possession.

In Morris Finance Ltd v Free [2017] NSWSC 1417, Morris Finance applied for an order for judicial sale of a property over which another party held the first mortgage. Morris Finance argued it had the benefit of an equitable charge over the land which secured unpaid moneys in a commercial lease agreement granted by the registered proprietor. In considering whether there was an equitable charge, Ward J agreed with recent cases from Victoria, in which it was stated by the Victorian Supreme Court that in Australia there is neither a required form for an equitable charge, nor a requirement to include a precise definition of the property over which the charge attaches. Despite the broad wording in the lease agreement, the Court found that Morris Finance did have an equitable charge over the land. The default under the lease was not contested, meaning the equitable charge was enforceable to recoup the money owing to Morris Finance. The first mortgagee did not object to the making of a court order for sale of the property, and the order was duly made.

The Court of Appeal outlined when the consent of the owner’s corporation is required for a lot owner’s development application in Owners Strata Plan No. 50411 & Ors v Cameron North Sydney Investments Pty Ltd [2003] NSWCA 5. Consent from owner’s corporation is not required for a development application when work is wholly within boundaries of lot. However, consent from owner’s corporation is required for a development application when works impact on common property. There is judicial debate as to what will entail ‘impact’. If the owner’s corporation decides not to provide consent, the lot owner can apply to the NSW Civil and Administrative Tribunal to settle the dispute.