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Waco Kwikform Limited v Jabbour [2010] NSWSC 1379

by Emma.Gleeson 7. February 2011 11:37



The plaintiff made an application under s 74K of the Real Property Act 1900 (NSW) to extend the operation of a caveat. The plaintiff lodged the caveat on or about 26 July 2010. It related to two parcels of land of which the defendant was the registered proprietor (alone or in common with others).


The interest claimed by the plaintiff in the caveat was an equitable interest as chargee. That interest was said to arise out of a guarantee and indemnity which the defendant entered into with the plaintiff on 14 October 2008.


The guarantee and indemnity related to goods and services provided by the defendant to a business conducted by Jabbcorp Pty Ltd (Jabbcorp). Voluntary administrators were appointed to Jabbcorp on 5 October 2010. On 26 October 2010, the plaintiff received a lapsing notice in respect of the caveat.




The questions arising for consideration on the application were set out by White J at [9]. Those questions, and the answers his Honour gave, are as follows:


1. ‘Did the plaintiff require leave under s 440J of the Corporations Act 2001 (Cth) to bring this proceeding?’

·         The application to extend the operation of the caveat was not a step by way of enforcement of the guarantee (s 440J(1)(a)) but rather a step to preserve the status quo: [11]. Nevertheless leave was required under s 440J(1)(b) because the application was a proceeding ‘in relation to’ the guarantee: [12].


2. ‘If so, can leave be given retrospectively?’

·         Yes: [14].


3. ‘If so, should retrospective leave be given to the plaintiff to bring the proceeding?’

·         The critical matters were (at [20]ff):

·         (1) if leave were refused, the plaintiff may suffer material damage: [21];

·         (2) the grant of retrospective leave would not be counter to the policy underlying s 440J of the Corporations Act 2001 (Cth): [22];

·         (3) the extension of the caveat was not a step in the enforcement of the guarantee: [23]; and

·         (4) the grant of retrospective leave would not interfere with the administration of Jabbcorp or the implementation of a deed of company arrangement: [25]-[28].

·         White J concluded that leave should be granted: [29].

4. ‘Is any debt secured by the guarantee and indemnity?’

·         It was at least seriously arguable that the guarantee and indemnity applied to a debt owing by Jabbcorp under a subcontract of 2 February 2010 and was not confined to debts entered into at the date of the guarantee: [36]-[37].

·         The lack of a judgment in relation to any or all of the amount claimed against Jabbcorp was not relevant: [39].

·         Although the defendant claimed that invoices giving rise to the debt did not comply with the subcontract, it did not necessarily follow that the money was not due: [41]-[42].

·         Thus there was ‘at least a serious question to be tried that [Jabbcorp] owes a debt to the plaintiff which is subject to the guarantee and indemnity and secured by the charge’: [43].

5. ‘Does the charge in the guarantee and indemnity create an interest in the land or only in the proceeds of sale of land?’

·         The charge was of the defendant’s beneficial interest in land: [45].


6. ‘Is it a reason not to extend the caveat that the plaintiff has not requested the defendant to execute a mortgage or other instrument of charge and has not sought the defendant's permission to lodge a caveat?’

·         No: [46]-[48].


7. ‘Does the balance of convenience favour extending the caveat?’

·         The plaintiff made the usual undertaking as to damages.

·         A second caveat had been lodged by another person.

·         The defendant’s proffered undertaking to not lodge any instrument for registration without first giving the plaintiff seven days’ clear notice would not provide sufficient protection: [54]-[55].

·         Registration of a plan of subdivision ‘would not materially reduce the plaintiff’s security’ and ‘should be capable of being implemented’ even if the caveat was extended: [58].

·         The balance of convenience favoured an extension of the caveat: [59].


It is generally necessary for a summons seeking the extension of the operation of a caveat to also seek final relief: [60]-[62]. This had not been sought in the present case. White J accepted the plaintiff’s undertaking to file a further amended summons seeking final relief: [63].


An order was made extending the caveat.



Relevant paragraphs of Ford:


[26.070], [26.072]



Ford's Principles of Corporations Law


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