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[2026] NSWSC 864
Supreme Court of NSW
2026-07-21
Bennett J
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Marginata Securities Pty Limited (Provisional Liquidators Appointed) v Kiah 1 Pty Limited [2026] NSWSC 864
Hearing dates: 16 July 2026
Date of orders: 21 July 2026
Decision date: 21 July 2026
Jurisdiction: Equity - Duty List
Before: Bennett J
Decision: (1) On the plaintiff, by its counsel, giving the usual undertaking as to damages, pursuant to s 74K of the Real Property Act 1900 (NSW), Caveat registered dealing X registered on the title of folio identifier X/X and known as X X X Drive, Gosford NSW be extended until further order of the Court. (2) The proceedings proceed by way of pleadings. (3) The plaintiff file and serve its Statement of Claim by 30 July 2026. (4) The proceedings be transferred to the Real Property List. (5) The proceedings to be listed in the Real Property List for directions on 31 July 2026. (6) Costs reserved.
Original judgment source is linked above.
Catchwords: LAND LAW — Caveats — Extension of operation of caveat — Balance of convenience — Defendant owner of land and seeks to develop land with residential units — Plaintiff loaned monies to defendant in 2023 pursuant to Deed of Loan — Plaintiff previously registered mortgagee — Plaintiff and defendant (and other parties) executed further deed extending the time for repayment under original deed and providing further advance — Defendant also granted new mortgage to plaintiff — Defendant disputes validity of further deed and mortgage instrument — Plaintiff discharges its first registered mortgage and is paid further monies — Plaintiff lodges caveat in 2026 — Defendant says caveat is preventing further funding of its development of the subject land — Development approval application in relation to land is ongoing — Plaintiff submits that removal of caveat would practically determine its claim for relief
LAND LAW — Caveats — Extension of operation of caveat — Undertaking as to damages — Plaintiff in provisional liquidation — Defendant submits plaintiff’s undertaking as to damages is inadequate — Plaintiff submits that removal of caveat would practically determine its claim for relief — Whether plaintiff’s undertaking as to damages is inadequate in the circumstances — Consideration in obiter of relevance of an inadequate undertaking as to damages where plaintiff’s claim may be determined by refusal to extend caveat
Legislation Cited: Real Property Act 1900 (NSW) s 74K
Cases Cited: Cooper v Moloney (No 6) [2012] SASC 212
Darlinghurst Public School Parents and Citizens Association v Department of Education [2026] NSWSC 780
Khaihra v Agarwal [2025] NSWSC 1276
Principal Properties Pty Ltd v Brisbane Broncos Leagues Club Ltd [2018] 2 Qd R 584; [2017] QCA 254
Sutherland v Vale [2008] NSWSC 759
Varley v Varley [2006] NSWSC 1025
Category: Procedural rulings
Parties: Marginata Securities Pty Limited (Provisional Liquidators Appointed) (ACN 610 129 630) (Plaintiff)
Kiah 1 Pty Limited (ACN 655 205 128) (Defendant)
Representation: Counsel:
D F Elliott (Plaintiff)
A Di Francesco (Defendant)
Solicitors:
Turks (Plaintiff)
M&A Lawyers (Defendant)
File Number(s): 2026/00219977
Publication restriction: Nil
By Amended Summons filed in Court on 2 July 2026, Marginata Securities Pty Limited (Provisional Liquidators Appointed) (Marginata or the plaintiff) seeks, in substance and relevantly to these reasons for judgment, the following Interim and Final Relief:
Interim Relief: An order pursuant to s 74K of the Real Property Act 1900 (NSW) extending the operation of caveat X (Caveat) until further order of the Court.
Final Relief: A declaration that that the whole of the property comprised in folio identifier X/X being the land situated at and known as X X X Drive, Gosford NSW (Property) is the subject of an equitable mortgage granted to Marginata dated 19 December 2024 which is known as the Second Marginata Mortgage (why this alleged equitable mortgage is the “Second” one will become apparent later).
Other final relief is sought but is not relevant to set out here.
an interest in the land [that is, the Property,] as mortgagee pursuant to the unregistered mortgage dated 19 December 2024 [ie, the Second Marginata Mortgage] in the amount of $3,970,844.52 plus any fees, interest and costs and any other advances made in favour of the mortgagee.
The defendant in these proceedings, Kiah 1 Pty Limited (Kiah 1 or the defendant), is the owner of the Property the subject of the Caveat. Kiah 1 seeks to lapse the Caveat so another lender, GEM Wholesale Mortgages Pty Ltd (GEM), can register a mortgage which the parties have described as the GEM 2026 Mortgage on the title to the Property (DWS p 7).
Counsel for Marginata described Marginata as a “finance company” (TR P9 L30).
1. On the plaintiff, by its counsel, giving the usual undertaking as to damages, pursuant to s 74K of the Real Property Act 1900 (NSW), Caveat registered dealing X registered on the title of folio identifier X/X and known as X X X Drive Gosford NSW be extended until further order of the Court.
2. The proceedings proceed by way of pleadings.
3. The Plaintiff file and serve its Statement of Claim by 30 July 2026.
4. The Proceedings be transferred to the Real Property List.
5. The Proceedings to be listed in the Real Property List for directions on a date convenient to the Court after 30 July 2026.
6. The Defendant pays the Plaintiff’s costs of and incidental to order 7 of the Amended Summons filed 2 July 2026.
(c) The Court dismisses the Plaintiff’s application to extend Caveat X.
(d) The proceedings are to continue by way of pleadings.
(e) The Defendant is to file and serve its notice of motion for security for costs within 14 days of this order.
(f) The Plaintiff is to file and serve a statement of claim within 7 days of this order.
(g) The Defendant is to file and serve any defence and cross-claim within 7 days after service of the Plaintiff’s statement of claim.
(h) The Plaintiff is to file and serve any further lay evidence within 14 days after service of the Defendant’s defence.
(i) The Defendant is to file and serve any further lay evidence within 14 days after the Plaintiff’s further evidence is served.
(j) The parties be granted leave to adduce expert evidence as to the authenticity of the Disputed Instruments in accordance with the regime set out in the s 167 notice served by the Defendant on the Plaintiff (Bechara 22.6.26 at Exhibit JB-3 pp 143-144).
(k) The proceedings be listed for further directions before the Equity Registrar on [date].
(l) Costs otherwise reserved.
(m) Liberty to apply on 2 days’ notice.
As these competing proposed orders disclose, the plaintiff seeks to keep the Caveat in place while the issues going to the Final Relief are determined, whilst the defendant seeks to have the Caveat removed before any determination. The real significance of these two interim positions, pending determination of the Final Relief, is discussed further below.
In short, as part of the Final Relief it seeks, the plaintiff seeks to have its equitable mortgage (the Second Marginata Mortgage) recognised as binding on the defendant and seeks orders facilitating a sale of the Property. In the meantime, Marginata seeks to protect its position of priority by the Caveat.
For its part, the defendant seeks to lapse the Caveat so that it can allow for another mortgage to be registered on the title of the Property (the GEM 2026 Mortgage, as defined below), before the determination of the plaintiff’s claims for Final Relief.
Accordingly, if the defendant is successful in these interlocutory proceedings (ie, the Caveat is not extended), it will be open to the defendant to seek to register the GEM 2026 Mortgage on title, as it has indicated it proposes to do. This would necessarily have the effect that, even if the plaintiff is successful in obtaining the Final Relief it seeks, GEM’s registered interest, as the mortgagee under the GEM 2026 Mortgage, will take priority over Marginata’s unregistered interest under the Second Marginata Mortgage.
Of this potential outcome, the plaintiff says that if the Caveat is not extended in these interlocutory proceedings, that “effectively, it will finally determine our rights today” (TR P22 L15-16).
Mr D F Elliott of counsel appeared for the plaintiff and provided written submissions dated 1 July 2026 (PWS). Mr A Di Francesco of counsel appeared for the defendant and provided written submissions dated 15 July 2026 (DWS).
At the commencement of the hearing Mr Elliott handed up a document entitled “Plaintiff’s Chronology” (PC). The PC listed various key events commencing with an entry from 2015, through to an entry dated 16 July 2026 (the day of the hearing). Mr A Di Francesco confirmed that the majority of entries listed in the PC were not in dispute, however sought to clarify the position of the defendant in relation to two documents with the date of 19 December 2024. On that date two documents are said to have been executed between the plaintiff and the defendant: a document referred to as the Deed of Extension and the Second Marginata Mortgage (see below). The defendant clarified that the validity of those two documents is in dispute. In DWS those two documents are referred to as the “Disputed Instruments”.
I was greatly assisted by both sets of written submissions and the PC, as well as by the oral submissions made by counsel in the course of the hearing.
As the Caveat is set to lapse on 22 July 2026, I have sought to provide my decision as expeditiously as possible, acknowledging the relative urgency of the circumstances. For this reason, in the interests of expedition, I will endeavour to keep these reasons as brief as possible.
The plaintiff read and relied on two affidavits of Glenn Ian Livingstone sworn 17 May 2026 (the plaintiff also tendered Exhibit GL-1 to that affidavit) (the May Livingstone affidavit) and 9 July 2026 (the July Livingstone affidavit). Mr Livingstone is one of the Court appointed provisional liquidators of the plaintiff.
In the May Livingstone affidavit, Mr Livingstone gave evidence that provisional liquidators of the plaintiff (and associated entities) were appointed by the Federal Court of Australia (FCA) on 19 February 2025, and that he and another person were appointed as “replacement” provisional liquidators of the plaintiff and related entities on 15 September 2025. Mr Livingstone and his fellow replacement liquidator were also appointed receivers and managers of various trusts, including a trust known as the “Marginata Securities Trust”.
Upon his appointment, Mr Livingstone inspected the “books and records” of the plaintiff that had been provided to him by the previous provisional liquidators. Mr Livingstone has ascertained that Search and Seizure Orders in relation to the plaintiff’s documents had previously been made by the FCA. Since that time, the books and records of the plaintiff, including in relation to this matter, were in the possession of the independent solicitor associated with the execution of those Search and Seizure Orders.
This evidence of Mr Livingstone explains why it is that there are evidentiary gaps in some of the plaintiff’s evidence. Whilst the defendant points to those evidentiary gaps as part of its opposition to the extension of the Caveat, counsel for the defendant confirmed that he was not being critical of Mr Livingstone. The defendant accepted that Mr Livingstone had done the best he could in the circumstances has found himself in (TR P43 L40 to P44 L1).
The defendant read and relied on three affidavits of Joseph Bechara (and associated exhibits) sworn 22 June 2026 (Exhibits JB-1 to 5 to that affidavit were also tendered) ([69]-[74] of that affidavit were not read), 1 July 2026 (Exhibits JB-7 to 9 to that affidavit were also tendered), and 15 July 2026 (and Exhibits JB-10 to 11 to that affidavit were also tendered). Mr Bechara is the sole director and secretary of Kiah 1, the owner of the Property.
The Property is a development site in Gosford (PWS [10]).
On 29 January 2015, a development application concerning the Property, DA X/2015, was lodged for the proposed construction of 75 residential apartments and 106 car spaces. Central Coast Council approved this development application in 2017 (the 201****7 A****pproval). There was a further modification application in relation to the development application just mentioned which was lodged in May 2018 and determined.
On 14 March 2022, Kiah 1 purchased the Property from its previous registered proprietor, Emirates Pearl Gosford Pty Ltd, for a purchase price of $3,740,000 (PWS [12]).
A Title Search from 19 March 2026 indicates that the Property is currently subject to a first registered mortgage granted to Leoni’s Cakes Pty Ltd, Jeffrey Charles Teytz, Jacqueline Ezer, Garrath Thomas Styles, Sylvia Stricker, Beal Pritchett Pty Ltd, Warwick 8ooper Bowes, Robyn Anne Bowes, Jennifer Louise Gay, Geoffrey Gobert Gay, Gjg Investing Pty Ltd, Janish Pty Ltd, Torbeag Pty Limited and lta Rawas (which appears to be known as the Kremnizer Mortgage Fund) for a principal advance of $3,250,000 (PWS [13]) (the First Mortgage).
The First Mortgage was executed on 23 December 2025 and recorded on title on 24 December 2025. The First Mortgage is set to expire on 23 December 2026.
When taken to the Title Search in the course of the hearing, I noted that following the First Mortgage, and before the plaintiff’s own Caveat, there appeared to be another Caveat in relation to “ADR Practice Pty Ltd”. Counsel for the plaintiff was unable to explain this. However, later in the course of the hearing, counsel for the defendant provided an explanation, wherein the following exchange took place:
DI FRANCESCO: Towards point 9 on the page, there is an asterisk and then the number 10 and there is a caveat by ADR Practice Pty Ltd.
HER HONOUR: Yes.
DI FRANCESCO: That is the name of the firm that trades as M&A Lawyers who are my instructing solicitors.
HER HONOUR: Okay.
DI FRANCESCO: I am instructed that that is a caveat in relation to security for legal fees. I am instructed by my instructing solicitor, Mr Michael who is sitting to my right that ADR Practice of which he is the director would consent to the GEM mortgage being registered on title. In my submission, although there’s no evidence about that, I could ask my solicitor to give evidence if required but that is the position in relation to that caveat. In my submission, that caveat should not be a problem in terms of what the Court is dealing with.
ELLIOTT: I accept my friend’s explanation so there doesn’t need to be any evidence about that.
Given this, the issue of the ADR Practice Pty Ltd caveat can be set to one side.
Notwithstanding the 2017 Approval, in about October 2025 the defendant decided to make a new development application in relation to the Property, comprising 139 dwellings. Mr Bechara in his evidence said that this decision was made in circumstances where the 2017 Approval was:
not feasible and would not meet certain standards, including because of the significant increase in construction costs and because sales revenues could not be increased sufficiently to offset those increased construction costs.
The plaintiff relies on the following circumstances to establish its caveatable interest (PWS [15]-[24]). It will be recalled that, aside from the two “Disputed Instruments”, the defendant does not challenge the validity of the various other documents or instruments cited and relied on by the plaintiff in the PC.
On 15 December 2023, Marginata as trustee for the Marginata Securities Trust entered into a Deed of Loan with Kiah 1 (in its personal capacity and as trustee for the Quarry Unit Trust) and Mr Bechara for a loan facility for the principal sum of $3,010,000 (Deed of Loan) which required repayment 12 months from the date of the advance of the principal sum. The purpose of the facility was to pay out the existing first registered mortgagee, Certane CT Pty Ltd (Certane). The advance was made, Certane discharged its mortgage and Marginata registered its mortgage (the First Marginata Mortgage) on the title of the Property.
Clause 6.1 of the Deed of Loan provided:
6. Securities
6.1 As security for the due and punctual performance by each and all of the Borrowers of all their (including respective) obligations to Marginata (which obligations including the payment of the Amount Owing), the Borrowers (including each) hereby and irrevocably (and irrespective of capacity):
(a) give the Securities;
(b) save with respect to matters covered by the Securities (or any Security) mortgage in favour of Marginata all their (including future acquired) right, title, and interest in any land and agree that:
(i) any mortgage(s) incorporate the terms of registered mortgage memorandum X (registered with Department of Lands NSW - LPI); and
(ii) Marginata is entitled to register such mortgage(s) and in any registrable mortgage dealing under the heading Terms and Conditions of this Mortgage (or the like), reference this deed as being what the mortgage (at least) incorporates and secures and registered memorandum X; and …
The definition of the term “Securities” included the “Real Property Mortgage”. “Real Property Mortgage” was defined as “the National Mortgage real property registrable mortgage granted by Kiah 1 (as mortgagor) in favour of Marginata (as mortgagee) over the Gosford Property”. The “Gosford Property” refers to the Property.
On or about 19 December 2024 (a few days after the monies owing under the Deed of Loan were repayable to Marginata), the plaintiff says (and the defendant disputes) that Marginata as trustee for the Marginata Securities Trust, Kiah 1 in its own capacity and as trustee for the Quarry Unit Trust, Mr Bechara, SAJ Nambucca Pty Ltd (a company which appears to be associated with Mr Bechara) and Joseph Bechara Holdings Pty Ltd in its own capacity and as trustee for the Joseph Bechara Unit Trust executed a document titled “Deed of Extension, Further Advance and Guarantee of Indemnity” (Deed of Extension). The plaintiff also says (and the defendant disputes) that Mr Bechara also executed on behalf of Kiah 1 a real property mortgage instrument over the Property to secure the amounts due under the Deed of Loan and Deed of Extension (Second Marginata Mortgage). The Deed of Extension and the executed Second Marginata Mortgage are the Disputed Instruments referred to by the defendant.
The Recitals to the Deed of Extension record (bolding as per original):
RECITALS
…
C. The Borrowers acknowledge that the Amount Owing to the Lender as at the Execution Date is no less than $3,970,844.52
D. The Borrowers have requested the Lender to extend the Repayment Date to the Extended Repayment Date.
E. The Borrowers intend to refinance the property situated at X X X Drive, GOSFORD NSW 2250 (Folio ID: X) and intend to repay to the Lender a sum of approximately $2,200,000.00.
F. The Borrowers acknowledge that despite the intended repayment to the Lender in Recital E above, there remains an Amount Owing of approximately $1,770,844.52.
G. The Borrowers have requested the Lender to discharge its first ranking mortgage over the property situated at X X X Drive, GOSFORD NSW 2250 (Folio ID: X) to enable the intended refinance in Recital E to occur.
H. The Guarantors have requested the Lender to provide further financial accommodation in the sum of approximately $150,000 (but, if some other amount is advanced by the Lender, that precise amount) to the Borrowers on the terms and conditions specified in the Loan Deed.
I. In consideration of the Lender agreeing to the Obligors’ request above, the Guarantors have each agreed to guarantee to the Lender the obligations of the Borrowers under the Loan Deed and to indemnify the Lender for any loss that the Lender suffers as a result of any breach of the Obligors of its obligations to the Lender as set out in this deed.
a. in consideration of the Borrowers paying the Extension Fee ($165,550), Marginata agreed to (clause 2.1):
i. extend the Repayment Date to 15 December 2025;
ii. discharge its first ranking mortgage over the Property.
iii. provide the Further Advance ($150,000) to the Borrowers;
b. Marginata was not prevented from registering any Securities (as defined in the Loan Deed) (see p.47 Exhibit GL-1) against the Property upon refinance of that Property (clause 2.4).
In about December 2024, Kiah 1 entered into a loan agreement with BE Co-investment 16 Pty Ltd (ACN 672 335 643) (BHG Global) for the sum of $2,690,500. Mr Bechara has given evidence that he cannot locate the loan agreement with BHG Global. Some of the money advanced under this loan agreement was used to pay money owing to Marginata. More specifically, of the sum of $2,690,500 advanced by BHG Global, Marginata was paid about $1,965,886.39. The First Marginata Mortgage was discharged and BHG Global registered its mortgage over the Property (BHG Global’s mortgage has since been discharged).
The plaintiff says that, at present, the amount due and still owing to Marginata under the Deed of Loan and the Deed of Extension is $2,513,146.27 (as at 27 May 2026). Interest continues to accrue on that unpaid sum.
The defendant disputes that any further funds are owed to the plaintiff. While the defendant appears to accept that the “pay out” made by the defendant to plaintiff as referred to in [39] above was less than what was then due to the plaintiff, Mr Bechara has given evidence that he “understood that the Plaintiff was content to receive the funds referred to in paragraph 9(a) [of his affidavit dated 1 July 2026] above (ie, $1,965,886.39) for its own commercial reasons and to accept that as a payout figure with certainty” .
It will be recalled that the documents supporting Marginata’s caveatable interest, the Deed of Extension and the Second Marginata Mortgage, are said by the defendant to not be valid instruments.
On the issue of the validity of the Disputed Instruments, the plaintiff says that Mr Bechara did not deny executing the Deed of Extension or the Second Marginata Mortgage. The plaintiff submits that all Mr Bechara says is that he does not recall signing the Deed of Extension and the Second Marginata Mortgage, and that if his signature is on those documents be believes it was obtained by “trickery”.
The precise evidence given by Mr Bechara referred to by the plaintiff is as follows:
[32] I cannot recall signing the Extension Deed, […] and I would not have agreed to such a document. I was never given advice on it. If my signature is in the Extension Deed, I believe it was obtained by trickery. I did not authorise anyone to use my signature, or to sign on my behalf, the Extension Deed. The first time I recall seeing the Extension Deed was when I reviewed the Glenn Affidavit and GL-1.
[33] I cannot recall signing the Mortgage [the Second Marginata Mortgage] […] and I would not have agreed to such a document. I was never given advice on it. If my signature is on that Mortgage, I believe it was obtained by trickery. I did not authorise anyone to use my signature, or to sign on my behalf, that Mortgage. The first time I recall seeing that Mortgage was when I reviewed the Glenn Affidavit and GL-1.
The “Glenn Affidavit” is the May Livingstone affidavit.
Given this, the plaintiff says there is a strong prima facie case for the existence of an equitable mortgage over the Property pursuant to the Second Marginata Mortgage which secures the amounts owing.
In reply to the plaintiff’s submissions that Mr Bechara does not deny executing the Disputed Instruments, the defendant made further submissions as to how the above quoted paragraphs of Mr Bechara’s affidavit evidence ought to be understood (TR P50 L37 to P52 L11). The defendant submitted that, properly understood, Mr Bechara’s affidavit does in fact contain a denial by him that executed the Disputed Instruments. In particular, the defendant says that by saying “if my signature is on” the two documents, Mr Bechara is making a forgery allegation. The defendant submitted that there was a “binary outcome” given the way Mr Bechara’s evidence is worded: either Mr Bechara signed the documents but his signature was obtained by “trickery” according to him, or he did not sign the documents. The defendant also pointed to the fact that Mr Bechara had given instructions to obtain forensic document examination, and that those instructions only make sense if he is intending to dispute the authenticity of his signature.
To understand the arguments in this interlocutory application, it is necessary to say something about the relationship between Kiah 1 and GEM and the context to the GEM 2026 Mortgage, to which I have already made some reference. GEM is a company which has seemingly loaned money to Kiah 1, pursuant to a loan agreement between Kiah 1 and GEM dated 2 September 2024 (the GEM 2024 Loan Agreement). The principal sum advanced initially under the GEM 2024 Loan Agreement is $250,000. Mr Taskin Satici is the sole director and secretary of GEM. He is also a director of a company named Lak Burwood Pty Ltd (Lak Burwood). As will be seen, Lak Burwood is involved with Kiah 1’s development project in relation to the Property.
There were two previous mortgages in favour of GEM securing the amounts due under the GEM 2024 Loan Agreement. These were identified as the GEM 2024 Mortgage and the GEM 2025 Mortgage. Both those mortgages have been discharged.
There does not appear to be evidence before the Court as to the specific further amount that GEM proposes to advance to Kiah 1 under the GEM 2024 Loan Agreement. It is those further advances which seemingly necessitated the GEM 2026 Mortgage, which was executed on 8 April 2026.
Mr Bechara has given evidence that on 25 February 2026:
Kiah 1 (as “Developer”) entered into a Joint Venture Agreement with Lak Burwood (as “New Investor”) and Kiah Property Pty Ltd (Kiah Property) (as “Existing Investor”) (the JVA); and
Kiah 1 as trustee for the Quarry Unit Trust and Lak Burwood entered into a loan agreement for an advance of $1,690,000 (Loan Agreement).
Mr Bechara’s “understanding” is that if the Caveat is not removed so that the GEM 2026 Mortgage can be registered, none of Mr Satici, Lak Burwood and GEM will advance “any further money” to Kiah 1 for the development of the Property. Mr Bechara gave evidence that Mr Satici said to him in May 2026:
I cannot lend you any further money unless I can lodge this mortgage. Otherwise, my interest cannot be protected, and I am worried that I will be left with nothing.
It will be noted that GEM is not party to either of the JVA or the Loan Agreement. The plaintiff submits that the inability to register the GEM 2026 Mortgage does not affect those arrangements. I will return to this submission below. Ultimately, I accept the submission of the defendant that, as a practical matter, any extension of the Caveat will mean that the advancement of funds to the defendant will be impacted, even if the capacity of GEM to register a mortgage did not form a part of its contractual arrangements.
In relation to the terms of the JVA, the plaintiff in its submissions relies on what is recorded in the recitals to that agreement. As summarised at PWS [29], which I quote from below, amongst other matters the recitals record that:
a. Kiah 1 is the owner of the Property and is the borrower under the Land Finance Facility;
b. the Parties have determined that an amendment to the existing Development Consent applicable to the Property is desirable so as to allow the Project to proceed to construction stage with a greater number of dual key apartments;
c. Lak Burwood and Kiah Property are prepared to provide funding to Kiah 1 on the terms of this document to enable Kiah 1 to amend the existing Development Consent so as to allow a greater number of dual key apartments and to effect a marketing campaign so as to obtain enough pre-sales of proposed apartments so as to allow the refinance of the Land Finance Facility by way of a Project Construction Facility; and
d. the Parties have otherwise agreed to mutually co-operate with each other in order to progress the Project on the terms of this document.
a. Lak Burwood agreed to contribute $1,690,000 to fund the Project pursuant to “any loan agreement” (clause 2.1);
b. for the purposes of security for the repayment of the Investor Loans and the performance of all obligations of Kiah 1 under this document and any Loan Agreement, Kiah 1 grants to the Investors a PPSA Security Interest in all of Kiah 1’s present and after-acquired property to secure Kiah 1’s obligations to the Investors under this document and any Loan Agreement (clause 2.2(b));
c. “PPSA Security Interest” is defined as (emphasis added):
PPSA Security Interest means a security interest within the meaning of the PPSA granted by [Kiah 1] in favour of the Investors under this clause 2.2, which only arises after the Land Finance Facility and the Project Construction Facility have been fully documented and effected, and all Security Interests granted in connection with those facilities have been duly perfected over the Project. the Property and the Parties where required
d. for the avoidance of doubt, the PPSA Security Interest does not attach for the purposes of section 19 of the PPSA until the conditions in clause 2.2(a)(ii) have been satisfied (clause 2.2(c));
e. Land Finance Facility, Project and Project Construction Facility are defined in the JVA as follows:
Land Finance Facility means the existing finance facility under which [Kiah 1] is the borrower.
Project means the project as described in this document.
Project Construction Facility means the proposed new loan facility which is intended to be sufficient to repay the Land Finance Facility and provide funding to construct the Project.
f. except as expressly contemplated by the JVA (including under clause 9), prior to the Project Completion or earlier termination of this document no Party can transfer or grant a participation interest in its Project Interest to a third party or grant any Security Interest over its Project Interest to any person, except with the prior written consent of the other Party. This includes the grant of a power of attorney or proxy with respect to its Project Interest. The “Project Interest” is an interest of a Party in the Project as specified in the JVA.
a. subject to the Borrower satisfying (to the Lender’s absolute satisfaction) all Conditions Precedent on the date of the document the Lender will advance and the Borrower will accept an advance of the Principal Sum (being $1,690,000) in one lump sum, which must be applied to the Approved Purpose (being the “Acquisition of X X X Drive, Gosford NSW 2250”) (clause 1.1);
b. the Lender may agree to advance further monies to the Borrower, in addition to the Principal Sum, from time to time. If the Lender does so agree then the Principal Sum will be taken to include any such new advances and the Borrower’s Debt will be taken to include the revised Principal Sum and all interest and other fees and charges accrued on any such new advances (clause 2.1);
c. interest on the Principal Sum will accrue from day to day and be computed on a daily basis on a year of 365 days. The rate of interest for the Principal Sum will be the Higher Rate (30% p.a; compounding monthly). However, if interest is paid when due and there is then no subsisting Event of Default, the Lender will accept interest calculated at the Lower Rate (20% p.a; compounding monthly) (clause 4.1);
d. the Borrower must repay to the Lender all money comprising the Borrower’s Debt on the Repayment Date. The Borrower may pay or repay all or part of the Borrower’s Debt on any business day prior to the Repayment Date (being 24 months from the date of initial advance of the Principal Sum (clause 3.1));
e. the Borrower will pay to the Lender the accrued interest in relation to the Principal Sum in accordance with the Interest Repayment Method (being monthly in arrears) and on the Repayment Date (clause 4.2); …
The plaintiff submits that there is no requirement for Kiah 1 to grant Lak Burwood a mortgage over the Property under either the JVA or the Loan Agreement. It says that the PPSA Security Interest granted under clause 2.2(b) of the JVA to the Investors (including Lak Burwood) does not arise until after the Project Construction Facility has been “fully documented and effected” (PWS [32]-[33]).
I accept the submission of the plaintiff that the terms of the JVA and the Loan Agreement do not appear to explicitly include a requirement for a mortgage to be registered over the title of the Property as a condition of funding.
On the other hand, I also accept the evidence of the defendant that Mr Satici has said that he will not advance any further money unless the GEM 2026 Mortgage is registered. As a practical matter, I do not consider this evidence to be inherently improbable, notwithstanding the lack of terms expressly requiring a registered mortgage as a precondition to an advance in the JVA and Loan Agreement. Of Mr Satici’s statements made to Mr Bechara, the following exchange occurred during the course of submissions (TR P20 L9-11):
HER HONOUR: So is there anything more that I read into that than them thinking “I just don’t want to be in the same position you’re in now”?
ELLIOTT: Precisely, yes.
Accordingly, I accept the effect of the evidence of the defendant of Mr Satici’s statements is that if the caveat is extended and the 2026 GEM Mortgage cannot be registered, then Mr Satici will not advance further funds.
The plaintiff contends that further, and in any event, the registration of the GEM 2026 Mortgage on title would have the effect of eroding any remining equity in the Property available to repay the plaintiff’s loan as secured by the Second Marginata Mortgage. It is this ultimate submission that the plaintiff makes when making the overarching claim that if the Caveat is allowed to lapse as a result of these interlocutory proceedings, that outcome will effectively finally determine its rights altogether.
74K Power of Supreme Court to extend operation of a caveat lodged under section 74F
…
(2) Subject to subsection (3), on the hearing of an application made under subsection (1), the Supreme Court may, if satisfied that the caveator*’s claim has or may have substance,* make an order extending the operation of the caveat concerned for such period as is specified in the order or until the further order of that Court, or may make such other orders as it thinks fit, but, if that Court is not so satisfied, it shall dismiss the application.
[4] … In short, the test to be applied on an application to extend the operation of a caveat under s 74K of the Real Property Act 1900 (NSW) is the test for the granting of an interlocutory injunction. Two issues must be addressed. First, whether the caveat has or may have substance, which encompasses the concept of a seriously arguable case. The second is the balance of convenience.
[62] The task of a court determining whether to exercise the power to grant an interlocutory injunction is to do so in a manner which achieves justice between the parties pending the final hearing of the proceedings.
[63] This was expressed in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63, Gleeson CJ at [12] stating:
17 … The justice and convenience of imposing interim restraint, pending the hearing of the final action, if it exists, lies in the need to prevent the practical destruction of that right before there has been an opportunity to have its existence finally established.
[64] The principal inquiries to be made in deciding whether to grant an interlocutory injunction have been expressed in slightly different terms, but to the same effect.
[65] In Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; [1986] HCA 58, Mason ACJ at [11] said:
18 … In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.
[66] In Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46, Gleeson CJ and Crennan J at [19], after repeating these inquiries, described them as:
19 … the organising principles, to be applied having regard to the nature and circumstances of the case, under which issues of justice and convenience are addressed. …
[67] In O’Neill, Gummow and Hayne JJ (with whose reasoning Gleeson CJ and Crennan J agreed: see [19]) at [65] expressed the first inquiry in this manner (footnotes omitted):
20 The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:
21 The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.
22 By using the phrase “prima facie case”, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring [sic] to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:
23 How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.
In these interlocutory proceedings, the defendant has conceded that there is a “serious question to be tried” concerning the Final Relief sought (DWS [1](a)), and thus there is no dispute that the plaintiff’s caveat involves a “seriously arguable case” or that the plaintiff’s claim “has or may have substance”. Accordingly, the focus of submissions, in writing and orally, was on the balance of convenience.
In referring to the relevant legal principles to be applied, in DWS the defendant sought to raise for the Court’s consideration two particular issues the Court ought to take into account (DWS [12]-[13]):
12. On an application concerning a caveat, the Court asks whether the caveator would be granted an interlocutory injunction to protect the interest claimed — that is, whether there is a serious question to be tried as to the existence of the interest referred to in the Caveat, and whether the balance of convenience favours protection of the alleged interest: Bayblu Holdings Pty Ltd v Capital Finance Australia Ltd (2011) 15 BPR 29,055 at [20]; Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222; Martyn v Glennan [1979] 2 NSWLR 234.
13. Two matters to take into account include:
(a) First, generally an interlocutory injunction is granted only upon the applicant giving the usual undertaking as to damages, which is the normal concomitant of such relief: UCPR r 25.8; Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249. Where no undertaking of value is proffered, and no security is offered, that is a compelling reason to refuse the relief, including refusing to extend a caveat: 2-6 First Ave Pty Ltd v Aquamore Credit Equity Pty Ltd [2018] NSWSC 980 at [28] and [31]; Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1990) 21 NSWLR 459 at 478; Australian Spirit Management Pty Ltd v Commissioner of Taxation [2011] NSWSC 1626 at [45].
(b) Second, the apparent strength of the claim is material to the balance of convenience and cuts both ways: Hanson Construction Materials Pty Ltd v Roberts (2016) 93 NSWLR 1; [2016] NSWCA 240 at [77], [79] and [82].
[68] The inquiry involving the balance of convenience is determined by whether the inconvenience or injury the plaintiff is likely to suffer if an injunction were refused outweighs, or is outweighed by, the injury the defendant is likely to suffer if an injunction were granted: Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1, Kitto, Taylor, Menzies and Owen JJ at 622–623. The plaintiff bears the onus of establishing that the balance of convenience lies in favour of granting the interlocutory injunction: O’Neill, Gummow and Hayne JJ at [65], [71].
[69] While the factors to be taken into account in determining where the balance of convenience lies will vary with the circumstances of each case, they most often include the strength of the plaintiff’s case, the hardship to the parties and third parties, delay, the utility of the proposed orders and the sufficiency of the plaintiff’s undertaking as to damages.
[70] The strength of the party’s case for final relief is an important consideration in determining where the balance of convenience lies, there being a connection between the inquiry about the serious question to be tried and the balance of convenience. In Warner-Lambert Company LLC v Apotex Pty Ltd (2014) 106 IPR 218; [2014] FCAFC 59, Allsop CJ, Jagot and Nicholas JJ at [70] said:
Whether an applicant for an interlocutory injunction has made out a prima facie case and whether the balance of convenience favours the grant of such relief are related questions. It will often be necessary to give close attention to the strength of a party’s case when assessing the risk of doing an injustice to either party by the granting or withholding of interlocutory relief especially if the outcome of the interlocutory application is likely to have the practical effect of determining the substance of the matter in issue or if other remedies, including an award of damages, or an award of compensation pursuant to the usual undertaking, are likely to be inadequate.
[71] The stronger the prima facie case for final relief and therefore the likelihood of success, the less is needed for the balance of convenience in favour of the grant of the interlocutory injunction: BMW Australia Ltd v Brewster (2019) 269 CLR 574; [2019] HCA 45, Edelman J at [216].
[72] The hardship to the parties, and the nature of that hardship, is a central feature in the discretionary considerations to be addressed in the balance of convenience. It requires the court to assess the harm to the plaintiff if there is no injunction and the prejudice or harm to the defendant if the injunction is granted: Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238; [2011] FCAFC 156, Dowsett, Foster and Yates JJ at [62]. The question of whether damages would be an adequate remedy for the plaintiff must always be considered as part of this inquiry, which “involves an assessment by the court as to whether the plaintiff would, in all material respects, be in as good a position if he were confined to his damages remedy, as he would be in if an injunction were granted”: Samsung at [62].
[73] The interests of third parties are also relevant to the balance of convenience, including any disadvantage or hardship caused to them if an injunction were refused, and whilst the weight of those matters depends on the circumstances of the case, they will rarely be decisive: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1; [1998] HCA 30, Brennan CJ and McHugh, Gummow, Kirby and Hayne JJ at [65]–[66].
[74] The giving of an undertaking as to damages by the plaintiff is an essential condition to the grant of an interlocutory injunction, unless there are exceptional circumstances: First Netcom Pty Ltd v Telstra Corp Ltd (2000) 101 FCR 77; [2000] FCA 1269, Beaumont, Burchett and Emmett JJ at [22]; Goater v Commonwealth Bank of Australia [2014] NSWCA 265, Ward JA at [92]. If it is demonstrated that the plaintiff has no assets, the undertaking offered may be of no assistance, although there is no inflexible rule that the plaintiff should be denied interlocutory relief if a meaningful undertaking cannot be given: Organic Marketing Australia Pty Ltd v Woolworths Ltd [2011] FCA 279, Katzmann J at [69], citing Caravelle Investments Ltd v Martaban Ltd (1999) 95 FCR 85; [1999] FCA 1505, Finkelstein J at [25]. If it is known that a plaintiff does not have sufficient resources to satisfy an undertaking as to damages, that may provide a basis on which to refuse an interlocutory injunction: Bond v Gray [2013] NSWSC 1793, Lindsay J at [29]–[30].
The real issue before the Court is whether the inconvenience or injury which the plaintiff would be likely to suffer if the application to extend the Caveat were refused outweighs or is outweighed by the injury which the defendant would suffer if the extension were granted.
The plaintiff bears the onus of establishing that the balance of convenience lies in favour of granting an extension of the caveat.
The plaintiff has proffered the usual undertaking as to damages (the undertaking). However, the defendant calls into question the value of the undertaking and says that it is insufficient for two relevant reasons.
In the defendant’s written submissions, four reasons were given as to why the undertaking offered should be considered insufficient. I do not need to consider the first and second reasons given (at the time of the drafting of DWS), as the form of the undertaking being responded to by the defendant in writing is different from the terms of the undertaking now before the Court (and as set out at proposed order 1 of the plaintiff’s proposed orders set out at [5] above).
First, the defendant submits that the undertaking is “unsupported and inadequate” (DWS [18]). In support of this submission, the defendant points to the July Livingstone affidavit and says that the plaintiff has not discharged its legal and evidentiary onus to demonstrate that the undertaking is of sufficient value. The defendant particularly points to the existence of FCA proceedings in which the plaintiff is involved, including the current lack of access that the provisional liquidators have to the books and records of Marginata because of the earlier mentioned Search and Seizure Orders. These issues are more fully set out by the defendant at DWS [18], which includes the following issues:
Should the plaintiff be required to make good the undertaking, the plaintiff would need to obtain a further order of the FCA, given that the terms of Mr Livingstone’s current appointment prohibits him from distributing assets of the Marginata Securities Trust without an order of the FCA (DWS [18(a)]).
The balance sheet for Marginata as at July 2025 (the 2025 balance sheet) shows a deficit of assets, when a liability to the defendant, which is in dispute, is taken into account. The net positive asset position reflected on the 2025 balance sheet assumes the plaintiff is owed money by the defendant (ie, it succeeds in these proceedings). (DWS [18(b)(i)]).
The financial statements are unreliable as they have not been exposed to an audit and are incomplete (DWS [18(b)(ii)]).
The defendant also pointed to other aspects of the 2025 balance sheet which it uses to cast doubt on the plaintiff’s ability to make good the undertaking at DWS [18(b)(iii)-(vi)]. In particular, the defendant says:
it is not clear how much of the approximately $40,000,000 in loaned monies owing to the plaintiff can actually be recovered;
there is no indication given as to whether the liabilities of the Marginata Securities Trust are secured or have priority over the assets of the Marginata Securities Trust; and
there is no estimate given as to either the costs of the provisional liquidators, the costs of recovering allegedly outstanding loans, and in relation to the costs and potential liability of the plaintiff in the FCA proceedings in which the plaintiff is a defendant.
Having considered the written and oral submissions of the defendant on this issue, I do not accept that the undertaking proffered by the plaintiff is unsupported and inadequate. Whilst I accept the submission as to inadequacy as made specifically in relation to the 2025 balance sheet, I note this is not the only evidence relied on by the plaintiff. In this, I have had regard to the other evidence provided in the July Livingstone affidavit, which sets out the steps Mr Livingstone has taken to obtain estimates of the debts owing to Marginata (at [9]), together with amounts already recovered (at [10]-[14]).
I accept that, over and above the terms of the 2025 balance sheet, the plaintiff has provided evidence that the undertaking it has proffered is meaningful and has value, notwithstanding some of the evidentiary limitations imposed by the result of the Search and Seizure Orders. Whilst the plaintiff has conceded that no payments may be made “without an order of the Federal Court”, I am of the view that this further step required before the plaintiff could make good the undertaking is not a bar to recovery by the defendant.
I thus conclude that the undertaking, as provided by the plaintiff, has value. I consider that this factor militates in favour of the granting of the extension of the Caveat.
The defendant submitted that the undertaking is insufficient to meet the potential loss and damage to the defendant that would be caused should the Caveat be extended and the plaintiff fail in obtaining the Final Relief it seeks. In making this submission, I note in particular the defendant submitted that “the potential loss to the Defendant and its joint venturers, should the extension of Caveat cause the project not to occur or the property to be sold in a forced sale by other creditors, is estimated to be in excess of $10 million” (DWS [19]).
The potential damage claimed by the defendant includes the following matters (DWS [19]):
(a) The early 2026 joint venture agreement between the Defendant, Lak Burwood Pty Ltd and Kiah Property Pty Ltd, includes an analysis of the forecast costs and profit of the development upon the modified development application (Bechara 22.6.26 at [55] & Exhibit JB-5 at pp 195-223). Exhibit JB-5 at p 223 forecasts the profit from the project, before tax, as being $15,441,348;
(b) An updated feasibility analysis of the forecast costs and profit of the development upon the modified development application conducted by Mr Bechara on 10 July 2026 forecasts the profit from the project, before tax, as being $12,236,442 (Bechara 15.7.26 at [10] and Exhibit JB-10 at p 26). Further to that document, the Defendant has also obtained an indicative loan terms sheet for construction finance from Prudential Finance for the proposed modified development which is open for acceptance until 16 July 2026 (Bechara 15.7.26 at [12]-[13] and Exhibit JB-10 at pp 27 to 29). Finance of this kind is currently on offer from Prudential Finance for the Defendant and would allow the project to be undertaken consequent on satisfying each of the conditions of the indicative terms sheet; and
(c) The Development Feasibility Model for the project prepared by Property Logic dated 29 September 2025 in respect of the previous development consent (for a lesser number of units and lower construction cost at 2025 prices) forecast [at page 10] that the profit from the project, before tax, was $11,804,907 (Bechara 15.7.26 at [6] and exhibit JB-10 at pp 1 to 12).
In all of this, the defendant confirms that it is reliant on funding from GEM in order to continue the project, and relies on its evidence that Mr Satici says that he will not advance any further money if the GEM 2026 Mortgage cannot be registered (DWS p 7). Related to this, the defendant made submissions as to the significance of there being no further funding (see [59] above), which included a reference to holding costs and to a pre-existing pre-sale to purchasers for a unit (DWS p 8).
Significantly, I note that all of these estimates of potential profit on the part of the defendant are contingent upon,
firstly, the planned expanded DA being submitted at a future stage, and also approved, and
secondly, that the development project proceeds and is successfully completed on that planned basis.
What is clear is that the only certainty at the time of this interlocutory proceeding is that there is currently a Pre-DA being considered (see [31] above).
Of these claims by the defendant as to future cost and profit, the plaintiff essentially submits that little weight can be given to them, as they are premised on the two unfounded assumptions set out in the paragraph above (ie, that there will be approval in the future of an extended DA application, and that the project will successfully complete according to plans), and as these estimates are not properly particularised.
I accept the submissions of the plaintiff on this issue. I accept that I cannot give significant weight to the estimates of profit claimed by the defendant, given the project is at such an early stage and there are so many uncertainties associated with whether the project would successfully progress to the best and most profitable outcomes hoped for by the defendant. The defendant appeared to recognise this difficulty with its reliance on the profit estimates, and relied on “loss of a chance” in support of its claim. It submitted orally:
So the potential problem for the defendant is that it loses the chance to obtain the modified consent, to then obtain the construction finance, to then carry out the project. The losses that could flow from that are quite significant. [TR P34 L36-39] …
It’s a different thing to say there are chances and the Court should ignore that the defendant will be deprived of a chance to obtain the consent and then carry on with the project. In my submission, it’s nothing like farfetched and fanciful because of the steps that have already been taken. There is a real chance that the consent can be obtained. Loss of a chance, leaving aside - one thing would be for the Court to say that it’s more likely than not that consent will be obtained. The Court can’t do that but the Court is aware that loss of a chance is something that can be compensated and quantified. If the caveat results in this project stalling and then ultimately the property being sold off on a forced sale, the developers will have lost the chance to achieve development consent and carry out the project. [TR P37 L19-29] …
But the submission I would make is this. If the development consent is successful and if the project is completed, potentially there is a profit to be made in excess of $10 million. Now, if what the defendants suffer is loss of a chance, presumably that would be some percentage of the $10 million. I’m using ten million as a lower figure than the estimates to be conservative. If the percentage were, for example, 80%, it would be $8 million. If the percentage were 50%, it could be $5 million and so forth but, in my submission, what the Court cannot do is say that the percentage would be zero. On any view, on the evidence before the Court, there is a realistic outcome that if the defendant is successful at final hearing, the usual undertaking as to damages will be called upon and will be quite realistically for a significant sum in the order of millions rather than thousands. [TR P40 L20-32]
In reply to these submissions as made orally, the plaintiff stated that the loss of a chance issue was effectively a neutral factor. It was noted, firstly, that any potential holding costs had not been identified. Secondly, whilst it was acknowledged that the Court will be familiar with considering loss of a chance when assessing contractual damages, it was stated that normally the Court will need some evidence assessing the probability of the opportunity coming to fruition, and that there are discounts made from that point (see Principal Properties Pty Ltd v Brisbane Broncos Leagues Club Ltd [2018] 2 Qd R 584; [2017] QCA 254 at [12]-[13]).
The plaintiff submitted that the proper characterisation of the defendant’s project is that it is in its infancy, given it is only at the Pre-DA stage (TR P45-50).
I broadly accept the submission of the plaintiff that the loss of a chance claim is a neutral issue. To the extent I do give this factor some weight, it is only slight. In this, I do accept the submission of the defendant that the Court should not accept that there was zero chance of a profitable outcome. However, I also accept that the Court has before it little or no evidence of probabilities either way and thus only slight weight may be given to this factor.
I conclude that the loss of a chance, as claimed by the defendant, has some slight value, certainly more than zero percent. However, when this factor is considered against other more substantial factors, I have determined that, overall, the balance of convenience weighs in favour of granting the extension of the Caveat.
I have referred elsewhere to what the plaintiff claims as the primary prejudice it will suffer if the Caveat is allowed to lapse as a result of these interlocutory proceedings, being that that outcome will effectively finally determine its rights.
I accept this submission.
If the Caveat is to lapse, the defendant has indicated it proposes to allow the registration of the 2026 GEM Mortgage.
As recorded right at the beginning of this judgment, the plaintiff submitted that because the substantial effect of the Caveat being removed would be that the Second Marginata Mortgage falls in the priority queue, having the caveat removed today would essentially determine its rights. The defendant did not seem to dispute this would be the practical outcome of a decision in Kiah 1’s favour. The plaintiff also submitted that there is not much equity in the land given the First Mortgage (TR P47 L46 to P48 L5), such that if the GEM 2026 Mortgage was registered (TR P48 L7-11):
it could conceivably erode whatever remaining equity is left in the property at this point in time, and that will effectively finally determine our rights because what is the point of us running a final hearing about the deed of mortgage and the deed of extension if we've already lost our priority?
There is little evidence as to the value of the land, such that it is difficult to assess definitively whether the Second Marginata Mortgage would essentially become valueless to the plaintiff if the Caveat is removed. However, I do accept that if the Caveat is allowed to lapse, the plaintiff’s claim will be of diminished value (and, depending on the value of the land, it may be of little to no value), given the other already registered interests on the land and the GEM 2026 Mortgage which would be registered. Accordingly, even if the plaintiff is successful and obtains the Final Relief it seeks, the 2026 GEM Mortgage would have priority over the Second Marginata Mortgage. I consider this a significant factor in considering the balance of convenience and am of the view it weighs in the direction of making the extension order sought by the plaintiff.
My acceptance of this submission also means that even if the defendant’s arguments that the undertaking proffered has no value and that the undertaking will be insufficient to meet a potential damages award should have been accepted (contrary to my conclusions above), the identified prejudice to the plaintiff in this case means the undertaking “lacking value” and being insufficient should not definitively count against the plaintiff.
In Varley v Varley [2006] NSWSC 1025 at [62]-[65], Campbell J discussed the circumstances in which a court may grant an interlocutory injunction even if the applicant’s undertaking as to damages might not be adequate (noting that in the case before his Honour, those circumstances did not apply). His Honour considered that one such circumstance is where the inability to provide an adequate undertaking would effectively preclude a plaintiff from the opportunity of having its rights determined in a full trial. Justice Blue wrote similarly in Cooper v Moloney (No 6) [2012] SASC 212 at [75]. His Honour said (citations omitted, italic in original):
In circumstances in which the grant or refusal of an interlocutory injunction will render the trial moot (either destroying the subject matter of the action for the plaintiff or destroying the defendant's defence), this circumstance affects the assessment of the balance of convenience. The fact of destruction of the subject matter of the action or of the defendant's defence needs to be weighed in the scales. Accordingly, the mere fact that a plaintiff's undertaking as to damages is not backed by any substance does not necessarily dictate the refusal of an interlocutory injunction in those circumstances.
Even if I had determined the plaintiff’s undertaking as to damages was inadequate, I would have accepted the plaintiff’s submission that I would still have needed to weigh that against the outcome that the plaintiff’s claims would have been substantially determined, as a matter of practicality, if the operation of the Caveat is not extended, such that the inadequacy of the undertaking would not have definitively weighed against the plaintiff.
Having regard to what is set out above, I record that I would have still considered the balance of convenience in favour of extending the operation of the Caveat even if I had determined the plaintiff’s undertaking as to damages was inadequate, because I consider that refusing the plaintiff’s application would substantially determine its claim for relief, and that consideration weighs significantly in favour of granting the plaintiff the Interim Relief it seeks.
I accept the contention of the defendant that the strength of the plaintiff’s case may be a relevant issue when considering the balance of convenience.
A central issue for the plaintiff’s case in the substantive proceedings is whether the Disputed Instruments are valid, and thus whether the plaintiff is entitled to enforce the Second Marginata Mortgage.
Before the Court in these proceedings are the two Disputed Instruments. One being the Deed of Extension and the other being the Second Marginata Mortgage. Both documents appear, on their face, to have been validly executed. It was not suggested by either party that this was not the case.
I have already set out the primary evidence of Mr Bechara on the issue of the validity of the Disputed Instruments (at [44] above). Of this evidence the plaintiff says that Mr Bechara does not deny executing the documents, but rather, that they were obtained by “trickery” and, as such, there is a strong prima facie case for the existence of an equitable mortgage (see [43]-[45] above).
Against this, the defendant says that the “apparent strength of the Plaintiff’s claim” is material and that here it is “attended by significant doubt” (DWS [23]). In support of this submission, the defendant relies of a number of factors, which include that the plaintiff holds no registered security over the Property, the authenticity of the two key documents is disputed, the Caveat overstated the plaintiff’s alleged claim, there was a delay in the plaintiff registering the Caveat, and the location of the Disputed Instruments has not yet been established (DWS [23]).
I acknowledge and accept these various issues raised by the defendant. However, I do not accept that their existence amounts to raising “significant doubt” as to the plaintiff’s claim.
Having regard to the legal principles set out above, I note that “it is sufficient that the plaintiff shows a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial”. I am of the view that the plaintiff has met this standard. The plaintiff may rely on the Disputed Instruments themselves, and it will be for the defendant to prove that those documents were procured by “trickery”, whatever form that took. Whatever form the defendant does rely on, it was conceded by the defendant that the basis of any allegation made against the validity of the two documents will be a very serious one (TR P50-51).
It is common ground that there is a serious question to be tried (or that a prima facie case has been made out). I do not accept, as the defendant contends, that I would “doubt” the case of the plaintiff, or that it is otherwise a weak case, such that this factor tips the balance of convenience in the defendant’s favour and militates against the making of the order sought by the plaintiff. As already stated, on the basis of the evidence before the Court in these interlocutory proceedings, I do not consider there is “significant doubt” as to the strength of the plaintiff’s case. I do recognise, however, that by the time of the final determination, there will likely be extensive evidence before the Court, include potential evidence from a forensic document examiner (P52 L4).
Notwithstanding this, I record that even if I had accepted the submission that the plaintiff’s case was weak (or that it was attended by significant doubt), I would still have determined that the balance of convenience weighed in favour of granting the extension of the Caveat, given the weight I have given the countervailing factors that I have already discussed.
Neither party made any submissions of substance in relation to the issue of costs.
The plaintiff seeks an order that the defendant pays its costs of and incidental to order 7 of the Amended Summons filed 2 July 2026, which will essentially comprise the costs of these interlocutory proceedings. No written or oral submissions were made in support of the making of that order.
The defendant noted that costs had been reserved on previous occasions where the Caveat had been extended and submitted that the appropriate course was that costs be reserved (or alternatively, costs be in the cause).
In the exercise of the Court’s discretion in relation to costs, I propose to make an order that costs be reserved. I did not hear submissions of any substance from the parties on this and given the relative urgency of this matter and associated need for the matter to progress to a final hearing expeditiously, I do not consider this is an appropriate matter for me to set a timetable to give the parties time for further written submissions in relation to costs (and thus cause further expense and delay).
For the reasons set out above, I make the following orders:
On the plaintiff, by its counsel, giving the usual undertaking as to damages, pursuant to s 74K of the Real Property Act 1900 (NSW), Caveat registered dealing X registered on the title of folio identifier X/X and known as X X X Drive, Gosford NSW be extended until further order of the Court.
The proceedings proceed by way of pleadings.
The plaintiff file and serve its Statement of Claim by 30 July 2026.
The proceedings be transferred to the Real Property List.
The proceedings to be listed in the Real Property List for directions on 31 July 2026.
Costs reserved.
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Marginata Securities Pty Limited (Provisional Liquidators Appointed)
Kiah 1 Pty Limited
[2026] NSWSC 780
[2001] HCA 63
[1986] HCA 58
[2006] HCA 46
[1968] HCA 1
[1998] HCA 30
(2001) 208 CLR 199
(1986) 161 CLR 148
(2006) 227 CLR 57
(1981) 146 CLR 249
(1990) 21 NSWLR 459
(2016) 93 NSWLR 1
(1968) 118 CLR 618
(2014) 106 IPR 218
(2019) 269 CLR 574
(2011) 217 FCR 238
(1998) 195 CLR 1
(2000) 101 FCR 77
(1999) 95 FCR 85