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[2011] NSWCA 71
mixed. Order 5(d) of the primary judge's orders was set aside and replaced with an order preventing acceptance or recording of caveats that purport to prohibit registration of a dealing by the Bank as...
The Court of Appeal accepted that the Supreme Court could, in an appropriate case, stop the Registrar-General from accepting certain future caveats. It did not uphold a blanket restriction. The order was narrowed to caveats that specifically purported to prevent the Bank from registering a transfer under its mortgagee's power of sale. The Court stressed that restrictions of this kind should be used sparingly because they can affect people who were not parties to the case.
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2,463 words · generated 02/10/2026
In Jensen v Bank of Queensland [2011] NSWCA 71, the Court of Appeal considered whether the Supreme Court could restrain the Registrar-General from accepting certain future caveats over land. The dispute concerned 11 Melaleuca Close, Castle Hill. The Bank of Queensland held a mortgage and had taken possession after the mortgagors defaulted. It had contracted to sell the property to Jennifer and Nigel Hancock, but successive caveats delayed attempts to complete that sale.
No linked legislation citations have been extracted yet.
The primary judge's factual outline, reproduced at [5], records that the Bank and the Jensens entered into a mortgage on or about 10 June 2005. The Bank began possession proceedings in January 2009. Default judgment was entered on 29 September 2009, and the Bank obtained possession in December 2009. The Bank contracted to sell the property on 19 June 2010 in exercise of its power of sale.
The first caveat was lodged in December 2009. Further caveats followed, lodged by different people and at times close to the expiry of earlier caveats. The primary judge recorded caveats lodged between June 2010 and February 2011, including claims based on leases or agreements said to involve the Jensens or the Principality of Snake Hill. Two attempted settlements, in September and December 2010, did not proceed because a caveat remained on title. The purchasers were in occupation under a licence, and the Bank said their finance approval was due to expire in early March 2011 ([5], [6]).
The primary judge ordered the Registrar-General not to accept or record caveats lodged on or after 14 February 2011, unless the Court gave leave. Jensen appealed that order. The appeal was limited to the order made under s 74MA(2)(b) of the Real Property Act 1900 (NSW) ([2]–[4]).
The appeal court considered additional title-search evidence, including two caveats lodged on 16 February 2011. One, lodged by Jensen, claimed an interest as “registered proprietor” and “owner and founding member” of the Principality of Snake Hill, and added wording specifically prohibiting transfer under power of sale. The other named Mark Alexander Pavic as caveator, but did not specifically prohibit the mortgagee's power-of-sale transfer ([8]–[10]). The distinction between caveats that purported to block the sale and those that did not became important to the scope of the final order.
The Court set aside the primary judge's broad order and substituted a narrower one. The Registrar-General was not to accept for lodgement or record a caveat that purported to prohibit registration of a dealing effected by the Bank as mortgagee exercising its power of sale or another power under the mortgage or law, unless the Court gave leave. The Court also ordered the third defendant to withdraw caveat AG70440X by 5 pm on 1 April 2011. The appeal was otherwise dismissed, with each party bearing its own costs.
The statutory question was how s 74MA(2)(b), which permits the Supreme Court to make “such other or further orders as it thinks fit”, interacted with the statutory arrangements for caveats and their lodgement.
Hodgson JA reasoned that a caveat is not lodged merely because someone presents it to the Registrar-General. Under s 36(1A), the Registrar-General allots a distinctive reference when accepting a caveat; under s 36(1B), lodgement occurs only when that reference is allotted. Section 36(1C) permits the Registrar-General to refuse to accept a caveat that does not comply with statutory requirements. From that structure, Hodgson JA concluded that an order under s 74MA(2)(b) could require that specified caveats not be accepted. The order would therefore operate as a requirement under the Act, rather than directing the Registrar-General to disregard a statutory duty ([22]–[23]).
The Court nevertheless treated the breadth of the order as important. A restraint could limit the ways in which people who were not parties exercised their rights. Hodgson JA said that the power should therefore “be exercised sparingly” ([26]). This was not a conclusion that the statutory ability to lodge caveats could be displaced generally. Instead, it called for attention to the specific caveats and the specific conduct the order was intended to prevent.
Section 74H(5)(g) was central to the distinction. As described in the judgment, a caveat protecting a particular interest does not ordinarily prohibit registration of a dealing made by a mortgagee exercising a power of sale in relation to a mortgage recorded or lodged in registrable form before the caveat, unless the caveat specifies otherwise. Hodgson JA considered that a caveat that did not purport to prevent the mortgagee's sale would not block registration. If a purchaser nevertheless refused to settle because of such a caveat, that refusal would not be justified by the caveat's effect under the provision ([27]).
On the facts, the series of caveats and their timing supported a risk of further caveats that might purport to obstruct the Bank's sale. Hodgson JA considered that the primary judge had implicitly found such a risk, and that the circumstances justified a limited order ([29]). The final restraint therefore targeted caveats that purported to prohibit the Bank's power-of-sale dealing, rather than every caveat concerning the land.
The Court also raised a separate compliance question. Section 74F(5)(b)(v) requires prescribed particulars of the claimed interest. Clause 2 of Schedule 3 to the Real Property Regulation 2008 requires the facts on which the claim is founded, including, if appropriate, how the claimed interest derives from the registered proprietor. Hodgson JA noted that caveats purporting to block the mortgagee's transfer did not appear to state how the claimed interest was derived from the Bank. He considered it generally appropriate for a caveat making that claim to identify that derivation ([24]). The Court did not, however, decide the validity of each caveat on that basis.
Beazley JA agreed that a more limited order could be made, but said it remained debatable whether the original order was within power ([31]). Macfarlan JA agreed with Hodgson JA ([33]). The reasons therefore support the narrower order, while recording Beazley JA's reservation about the original order's breadth and legal basis.
The judgment does not describe a legislative amendment or announce that the statutory text had changed. Its significance in this case lies in the Court of Appeal's interpretation of how existing provisions worked together.
Before the appeal, the primary order restrained acceptance and recording of any caveat lodged in respect of the property from 14 February 2011, unless leave was obtained. The Court of Appeal replaced that property-wide and caveat-wide restraint with one focused on caveats purporting to prevent registration of the Bank's power-of-sale dealing. The practical legal distinction was therefore between caveats that specified that prohibition and caveats that did not.
The Court's reasoning linked three aspects of the statutory scheme. First, s 74MA(2)(b) gave the Supreme Court power to make further orders in proceedings concerning withdrawal of a caveat. Secondly, ss 36(1A)–(1C) made acceptance by the Registrar-General part of the statutory process by which a caveat became lodged. Thirdly, s 74H(5)(g) limited the effect of some caveats on mortgagee dealings. In combination, those provisions supported the Court's conclusion that a targeted order could be made without treating the Registrar-General as bound to accept every caveat presented.
The judgment also describes the statutory protections for proprietors and mortgagees that Jensen's counsel relied on: lapsing procedures, restrictions on repeated caveats under s 74O, and compensation provisions under s 74P ([13]–[16]). The Court did not hold that these mechanisms displaced the power under s 74MA(2)(b). Rather, it concluded that the court had an additional power to make an order, while emphasising that the order should be carefully confined.
The decision's qualification is as important as its recognition of power. It does not establish that courts may routinely prevent caveats from being lodged, nor that a caveat is invalid merely because it delays a transaction. It ties the restraint to the facts and to caveats expressly purporting to stop the Bank's power-of-sale transfer. The judgment also identifies a possible formal-compliance issue where a caveator asserts an interest that would defeat or obstruct a mortgagee's dealing but does not explain how that interest is derived from the mortgagee. That observation is expressed as a general view about what is “generally” appropriate, not as a final ruling on each caveat's validity ([24]).
At [22], Hodgson JA said: “the court does have the power to make the order that was made by the primary judge.” The reasoning was that the Registrar-General accepts a caveat before it is legally lodged, and s 36 permits refusal where statutory requirements are not met. In plain English, the Court treated its order as capable of forming part of the requirements governing acceptance.
At [23], Hodgson JA explained that an order preventing acceptance would mean that the caveat did not comply with a requirement under the Act. He rejected the suggestion that the order would force the Registrar-General to breach a statutory obligation. The reasoning depends on the relationship between the court's order and the statutory acceptance process, rather than on a general power to erase caveat rights.
At [26], Hodgson JA said the power “should be exercised sparingly”, because an order could limit the exercise of rights by someone who was not a party. This is a practical caution about procedural fairness and the possible impact on absent people. It helps explain why the Court narrowed the order even though it found power to make one.
At [27], he said the order should not extend to caveats that did not purport to affect the Bank's power of sale. In the Court's reading, s 74H(5) meant those caveats would not prevent the relevant registration. The judgment added that a purchaser who refused to settle because of such a caveat would be in breach of contract. That statement was part of the Court's reasoning about the proper scope of the order, not a decision on a separate contractual dispute.
At [28], Hodgson JA concluded that the particular circumstances justified preventing acceptance of caveats that did specify that they prohibited the Bank's power-of-sale dealing. The record of repeated caveats, prior failed settlements, and new caveats was material to this conclusion. The order was thus tailored to the type of caveat identified as a risk to completion.
At [24], Hodgson JA noted a “real question” about whether caveats expressly prohibiting the Bank's transfer complied with the requirement to provide prescribed particulars of the claimed interest. The plain-English point is that a caveat claiming an interest that obstructs the mortgagee's sale may need to explain the factual and legal route by which the claimed interest is derived from that mortgagee. The Court did not finally determine the compliance of every caveat.
The judgment is most directly relevant to a fact pattern with several features present together: a mortgagee has exercised or is exercising a power of sale; one or more caveats purport expressly to prevent registration of the mortgagee's transfer; successive caveats have been lodged in a pattern that repeatedly delays completion; and there is evidence that further caveats may be lodged.
The case also directs attention to the wording and particulars in each caveat. It distinguishes a caveat that merely asserts an interest from one that specifically says the Registrar-General must not record a mortgagee's power-of-sale dealing. It further raises the question whether the caveat provides the prescribed particulars, including how the claimed interest derives from the registered proprietor, where that is appropriate.
The decision does not establish that all repeated caveats are abusive or that any caveat affecting a sale can be excluded. Its own limiting principle is that an order affecting non-parties should be exercised sparingly. The specific order was justified by the reported pattern and was confined to caveats purporting to obstruct the Bank's power-of-sale transfer. The Court's analysis therefore makes the particular statutory wording, the caveat's terms, the history of lodgements, and the likely effect on the mortgagee's dealing important features.
The judgment text supplied here reports no later decisions applying, distinguishing, or reconsidering Jensen. It cites John Alexander's Clubs Pty Limited v White City Tennis Club Ltd (2010) 241 CLR 1, but only to say that the order did not, in Hodgson JA's view, raise the considerations dealt with there ([26]). It also refers to Williams v Mark Australia Limited (1985) 5 NSWLR 529 in relation to evidence about possible practical difficulties for the Registrar-General in complying with an order ([21]).
Those references do not establish how subsequent courts treated Jensen. The source text permits the conclusion that the Court of Appeal recognised a power to make a limited order and stated that it should be exercised sparingly. It does not permit a grounded account of later judicial treatment. Any assessment of the case's subsequent development would require later authorities, which are not included in the material provided.
The judgment leaves several issues open or only partly addressed. First, Beazley JA considered it debatable whether the original, broader order was within power, while agreeing there was power to make a more limited order ([31]). The decision therefore contains a clear basis for the narrower order, but records a judicial reservation about the original order's scope.
Secondly, the Court did not determine whether the individual caveats complied with s 74F and the Regulation. Hodgson JA identified a “real question” about caveats that specifically prohibited the power-of-sale transfer but did not state how the interest derived from the Bank ([24]). That observation indicates a point requiring examination of each caveat's wording and supporting facts.
Thirdly, the judgment does not set out a general test for when the risk of further caveats is sufficient to justify an order. Hodgson JA relied on the pattern in this particular case and found the primary judge had implicitly identified a danger of further caveats ([29]). The decision does not specify how much evidence, how many caveats, or what degree of connection between caveators would be required in another case.
Fourthly, the Court did not resolve all issues concerning non-parties. The limited order affected the future lodgement process for anyone seeking to lodge a caveat of the specified kind, but the judgment's caution is that such consequences require restraint. It does not provide a comprehensive procedure for notifying or hearing possible future caveators.
Finally, the Court did not decide the underlying merits of the various claimed interests or determine the truth of assertions concerning the Principality of Snake Hill. Its focus was the statutory power to control acceptance of caveats and the scope of an order in the circumstances before it.
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Judgment 1BEAZLEY JA: Justice Hodgson will give the first judgment. 2HODGSON JA: On 22 February 2011, in proceedings brought in the Equity Division by the Bank of Queensland Limited (the Bank) against Karl Hoermann, the Registrar General of New South Wales and Paula Jensen, Gzell J made the following orders: 5(c). An order, pursuant to s74MA(2)(a) of the Real Property Act, that the first defendant withdraw the Caveat before 5pm on 22 February 2011. 5(d). An order or direction, pursuant to s 74MA(2)(b) of the Real Property Act, that, until registration of an instrument of transfer in respect of the Property between the plaintiff and Jennifer Adele Hancock and Nigel Leigh Hancock or until the Court otherwise orders, the second defendant not accept lodgement, and remove or not record in the Register, any caveat lodged in respect of the Property on or after 14 February 2011 otherwise that with leave of the Court. 7. Costs. 3Ms Jensen sought leave to appeal from that decision. 4On 24 February 2011, Beazley and Macfarlan JJA granted leave to appeal, limited to the order made by Gzell J under s.74MA(2)(b) of the Real Property Act , and their Honours expedited the hearing of the appeal. It was noted that the representatives of the Bank were to convey to the Registrar General the Court's wish to have assistance from the Registrar General as to the validity of this order. 5The primary judge gave the following outline of facts, giving rise to the Bank's proceedings before him: 3 The amended summons was taken out with respect to caveats lodged on land in New South Wales and is within the jurisdiction of this court. The plaintiff is the mortgagee in possession of residential premises at 11 Melaleuca Close, Castle Hill. 4 The first defendant, Karl Hoermann, lodged a caveat with respect to the property on or before 8 February 2011. The second defendant is the Registrar-General of New South Wales who has entered a submitting appearance. The third defendant, as I have mentioned, is Ms Paula Jensen, otherwise known as Princess Paula of the Principality of Snake Hill. 5 The registered proprietors of the property and mortgagors under the mortgage are the third defendant, Ms Helena Jensen and Mr Paul Jensen. Each has been served in accordance with orders made by Bergin CJ in Eq on 10 February 2011. The matter is related to other proceedings for possession and yet other proceedings for an extension of caveat. 6 On or about10 June 2005 the bank as mortgagee and the Jensens' as mortgagors entered into a mortgage over the property. 7 On or about 22 January 2009 the bank commenced the possession proceedings because of default under the mortgage and sought judgment in the amount of $869,902.58 plus interest and costs. The Jensens' were the defendants in those proceedings. 8 On 21 July 2009 Hoeben J ordered that a defence filed in the possession proceedings be struck out. The defence relied primarily on the allegation that the property was part of the independent territory of the principality of Snake Hill and was not subject to the jurisdiction of this court. A motion for default judgment was filed that day. 9 On 29 September 2009 default judgment was entered ordering the Jensens' to give possession of the property and pay $919,774.68 together with costs. 10 On or about 3 December 2009 the bank obtained possession of the premises. 11 On or about 15 January 2010, Ms Paula Jensen filed a notice of motion seeking orders that, relevantly, the default judgment be set aside or enforcement of it be stayed. The primary ground for that relief was the status of the principality of Snake Hill. 12 On 13 May 2010, Davies J heard and dismissed the notice of motion. 13 On 18 June 2010, Ms Paula Jensen sought an injunction and/or stay of the orders of Hoeben and Davies JJ pending an appeal. On that day Bergin CJ in Eq heard the application and refused to make the orders sought. 14 On 19 June 2010, in exercise of its power of sale, the bank entered into a contract for sale of the property to Jennifer and Nigel Hancock. 15 Settlement of that sale contract was initially scheduled to take place on 19 July 2010 but was prevented by a caveat lodged by the principality of Snake Hill on or about 24 December 2009. 16 On 7 July 2010 the bank served a lapsing notice in respect of that first caveat. That caveat was allowed to lapse. 17 In the period from June 2010 to February 2011 further caveats have been lodged by different persons one after the other and in circumstances where each caveat was lodged in very close proximity to the expiry of the period for lapse of the preceding caveat. Two subsequent attempts at settlement of the contract for sale on 30 September 2010 and 13 December 2010 did not proceed due to the presence of one of the caveats. 18 The details of the dates on which those caveats were lodged and the interest in the land claimed by the caveator are as follows: 24 December 2009, first caveat lodged noting the interest as the principality of Snake Hill. 17 June 2010 second caveat lodged by Lydia Williams, caveatable interest a secession contract and a private lease dated 27 December 2006 with the principality of Snake Hill. 24 September 2010 third caveat lodged, caveator Faye Combe stating she was the Ambassador to Australia for the principality of Snake Hill, the premises formed the embassy and she held commercial leases of a part of the premises. 9 November 2010, fourth caveat lodged, by Carmelo Vescio, caveatable interest a commercial lease of part of the property of 14 January 2007. 9 December 2010, fifth caveat lodged by Allan Schambri, caveatable interest as per commercial lease with annexure of 26 February 2009 with the Jensens'. 8 February 2011 sixth caveat lodged by the first defendant, caveatable interest commercial lease between the first defendant and the third defendant. No date for that lease was given. 19 Two further caveats were lodged by the third defendant on 16 February 2011, the contents of which were not before the court. 20 On 10 November 2010, Ms Combe applied to this court ex parte for orders extending the third caveat. That application was heard by White J. His Honour refused to make the orders and instead listed the matter before the Registrar for directions. 21 Since about 2 November 2010, the purchasers have been in occupation of the property pursuant to a licence. 22 The purchasers have informed the bank that their finance approval expires in early March 2011. 6The primary judge gave the following reasons for making the order now under challenge: 32 In case the balance of convenience is relevant, each of the second to sixth caveats claims an unregistered lease interest derived from the Jensens and is purportedly consented to by the Jensens. In each case other than the sixth caveat the alleged lease post-dates the date of the mortgage. In the case of the sixth caveat, no date is recorded. 33 The bank submits that the timing of the lodgement of the second to sixth caveats and the nature of the interest claimed demonstrates that the caveats are being lodged for the purpose of frustrating the completion of the sale contract and not in aid of any interest that could possibly prevail against the registered interest of the bank. I agree with that submission. 34 There are no orders of the court preventing the exercise by the bank of its power of sale. Indeed the court has refused to make such orders on two occasions on the application of Ms Paula Jensen. 35 Ms Jensen has lodged an application for leave to appeal to the Court of Appeal from the decision of Davies J. However, the application for leave to appeal does not operate as a stay or an injunction. 36 The bank has exercised its power of sale by entering into the sale of contract with the purchasers on 19 June 2010. The interests of both the bank and the purchasers are being frustrated by the pattern of lodging of caveats against the property as set out earlier in this judgment. Those interests will be further prejudiced if completion does not occur prior to early March 2011, owing to the expiry of the purchasers' financial approval. 37 If a lapsing notice were to be served in respect of the sixth caveat the bank has submitted that it has no confidence that a seventh caveat would not be lodged by another person on expiry of the period for lapse of the sixth caveat in accordance with the previous pattern of conduct. As I have already mentioned a seventh and eighth caveat have been lodged by Ms Paula Jensen. 38 An injunction may be granted to restrain a person from lodging further caveats ( Urban Traders Pty Ltd v Proceris Pty Ltd [2005] NSWSC 1192). Given the established pattern of the caveats being lodged by different persons, it is not appropriate to restrain a named person from lodging any further caveat. Rather it is appropriate to order that the second defendant, the Registrar-General, not accept for lodgement any further caveat and not record the details of such caveat on the register and to remove any such caveat from the register. 7The notice of appeal filed by the appellant, who was then unrepresented, contained 11 grounds of appeal, of which grounds 8 to 11 were outside the leave granted. Grounds 1 to 7 were as follows:
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 March 2011
Jensen
Bank of Queensland
Order 5(d) of the primary judge's orders was set aside and replaced with an order preventing acceptance or recording of caveats that purport to prohibit registration of a dealing by the Bank as mortgagee exercising its power of sale, unless leave of the Court is obtained. The third defendant was ordered to withdraw caveat AG70440X by 5 pm on 1 April 2011. The appeal was otherwise dismissed, with no order as to costs. The Bank undertook not to lodge a transfer for registration before 5 pm on 11 April 2011.