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[2025] NSWSC 1262
General information, not legal advice.
Supreme Court of NSW
2025-10-27
Richmond J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Xu v Chen [2025] NSWSC 1262
Hearing dates: 24 October 2025
Date of orders: 27 October 2025
Decision date: 27 October 2025
Jurisdiction: Equity - Real Property List
Before: Richmond J
Decision: Summons dismissed with costs.
Catchwords: LAND LAW — Caveats — Extension of operation of caveat — Whether extension of operation of caveat permissible when service of the lapsing notice has been effected — No issue of principle LAND LAW — Caveats — Lodgment of second caveat claiming same interest as previous caveat — Whether interest claimed in caveat in fact ‘in respect of the same estate, interest or right and purporting to be based on the same facts as the first caveat’ — No issue of principle
Legislation Cited: Real Property Act 1900 (NSW)
Cases Cited: ATF Group Pty Ltd v Melek [2023] NSWSC 333; (20230 20 BPR 43,111
FTFS Holdings Pty Ltd v Business Acquisitions Australia Pty Ltd [2006] NSWSC 846; (2006) 12 BPR 23,517
Hanson Construction Materials Pty Ltd v Roberts (2016) 93 NSWLR 1; [2016] NSWCA 240
Sutherland v Vale [2008] NSWSC 759; (2008) 14 BPR 26,255
Woodsman Pty Ltd v Jozic [2018] NSWSC 1311; (2018) 19 BPR 38,649
Texts Cited: B Edgeworth, Butt’s Land Law (7th ed, 2017, Thomson Reuters)
Category: Procedural rulings
Parties: Fengying Xu (Plaintiff)
Zhihua Chen (Defendant)
Representation: Counsel:
D J Townsend (Plaintiff)
D A Pittavino (Defendant)
Solicitors:
JurisBridge Legal (Plaintiff)
AHD Lawyers (Defendant)
File Number(s): 2025/357939
Publication restriction: Nil
The plaintiff commenced these proceedings by filing a summons on 17 September 2025 seeking an order pursuant to s 74K(2) of the Real Property Act 1900 (NSW) that a caveat lodged by the plaintiff over the leasehold interest of the defendant in a unit located at Shelly Street, Sydney (the Shelly Street property) be extended until further order. No final relief was sought in the summons.
It is not in dispute that this caveat (first caveat) has now lapsed. When the matter came before me for hearing on 24 October 2025 the plaintiff’s application, made orally at the commencement of the hearing, was for an order under s 74O(2) of the Real Property Act for leave to lodge a new caveat. When asked to identify the caveatable interest claimed under the new caveat, the plaintiff’s counsel, Dr Townsend, stated that it was ‘a beneficial interest in leasehold estate pursuant to an express, resulting or constructive trust’ and the details supporting the claim were ‘ex-partner provided funds which were used for acquisition of the leasehold estate’.
For the reasons which follow, the application to lodge a new caveat under s 74O(2) is refused. Accordingly, the summons should be dismissed with costs.
The plaintiff and the defendant were married from 1984 until 2019. On 4 March 2019 they entered into a ‘divorce agreement’ in China which included a term that the ‘parties have no real estate to divide’.
The plaintiff lodged the first caveat on 22 December 2022. The interest claimed in the first caveat was ‘life estate by virtue of beneficial interest in trust’ and the details supporting the claimed interest were described as ‘ex-partner provided financial support’. The first caveat identified the name and address for service of notices on the caveator as ‘LWPG & Partners, Level 5, 115 Pitt St, Sydney, NSW 2000’.
On 21 August 2025, Mr Vincent Zhu of AHD Lawyers (Mr Zhu), the defendant’s solicitors, sent an email to LWPG Lawyers, who were then acting for the plaintiff, contesting the caveatable interest claimed in the first caveat and inviting the plaintiff to withdraw it.
On 27 August 2025, Ms June Liu of JurisBridge Legal (Ms Liu), the current solicitors for the plaintiff, sent an email to Mr Zhu informing him that JurisBridge Legal were now acting for the plaintiff, raising concerns about the reasons for the defendant seeking to remove the caveat, and seeking irrevocable undertakings from defendant to refrain from disposing, selling or encumbering his interest in the Shelly Street property. The email then stated that if those undertakings were not given by 12 noon on 29 August 2025, the plaintiff ‘may seek interlocutory relief from the court in the form of orders to the effect of the above undertaking’.
On 29 August 2025 the defendant’s solicitors caused a lapsing notice to be served on LWPG & Partners by registered post at the address for service specified in the first caveat.
On 2 September 2025 Mr Bill Lee of LWPG Lawyers sent an email to Mr Zhu, with a copy to Ms Liu, attaching a copy of the lapsing notice and informing Mr Zhu that his firm no longer acted for the plaintiff and that Ms Liu was now acting for her.
On 17 September 2025, the plaintiff filed the summons in these proceedings. The parties were notified that the summons would be listed in the Real Property List for a first directions hearing on 17 October 2025.
On 18 September 2025, Ms Liu sent an email to Mr Zhu contending that the lapsing notice had not been properly served, seeking consent to orders in the form of the relief sought in the summons by 4pm that day and concluding with the following: ‘In the event that the Defendant does not consent to the enclosed orders, the Plaintiff reserves the right to approach the Court to seek that such orders be made, including, if necessary, on an urgent basis by the Duty Judge.’
While the plaintiff disputed in this letter that the lapsing notice had been properly served, and continued to do so in correspondence and also in written submissions at the hearing, it is clear that the lapsing notice was properly served on the plaintiff because it was sent by registered post to the address for service specified in the caveat: Real Property Act, s 74N(1)(b). It is also clear that the plaintiff’s current solicitors, JurisBridge Legal, were on notice of the existence of the lapsing notice from 2 September 2025, which was only a short time after it was served.
On 19 September 2025, Ms Belle Lou of AHD Lawyers sent an email to Ms Liu contending that (a) the summons was defective in that it did not claim final relief, (b) the caveat was defective in the description of the caveatable interest claimed and disputing the existence of the interest claimed, (c) rejecting the contention that the lapsing notice had not been validly served, and (d) noting that the plaintiff had clearly received a copy because she had filed the summons. The letter then concluded (emphasis added):
‘It is irrelevant to the above analysis whether our client has any intention to deal with the property, but we confirm that he currently has no intention of transferring, mortgaging or otherwise dealing with his interest in the property; and you have provided no evidence to the contrary.
In light of the above, your client should forthwith discontinue the current proceedings.’
‘While we hope that it will be unnecessary, the Plaintiff reserves her right to take any action necessary to prevent the frustration of the Court’s adjudication of the Summons, should the Defendant decline to provide the requested undertaking. The plaintiff further reserves the right to produce this correspondence in support of any such action.’
No response was received to this letter and in early October the first caveat lapsed, the plaintiff having failed to apply to the Duty Judge for an interim extension of the first caveat which was a course open to her.
On 8 October 2025, Ms Liu sent an email to Mr Zhu noting that the caveat had lapsed and seeking an undertaking from the defendant not to sell, dispose of, transfer, mortgage, encumber, further encumber or otherwise deal with his interest in the Shelly Street property and stated that if the undertaking was not given by 12 noon on 9 October 2025, the plaintiff reserved her right to approach the court for orders on an urgent basis, including ‘to seek leave to lodge a further caveat (to the same effect as the Caveat in issue) under Real Property Act 1900 (NSW) s 74O and/or to seek freezing orders against the Defendant’. No such approach was made.
On 17 October 2025 the matter came before Pike J for the first time for directions in the Real Property List. His Honour proposed that the matter come back the following Friday, 24 October 2025, to allow the parties to put on evidence and submissions on whether leave should be granted to the plaintiff to file a further caveat. In the course of oral argument, Dr Townsend, appearing for the plaintiff, sought ‘an order be made that pending the resolution of this proceeding, the defendant not sell, dispose of, et cetera’ the Shelly Street property. When asked what evidence there was of a risk of such a dealing, Dr Townsend said that the lapsing of the caveat itself was such evidence and referred also to the fact that the defendant is understood to be resident in China with no significant Australian property other than the Shelly Street property. Mr Pittavino, appearing for the defendant, when responding to Dr Townsend’s application referred to the fact that ‘in correspondence with my learned friend’s instructors, my instructors have indicated that my client has no intention of dealing with the property’. This was clearly a reference to what was said in the letter dated 19 September 2025 set out above.
Pike J said that he was not satisfied on the evidence before the court that he should grant an injunction of that kind but that did not shut out the plaintiff from approaching either himself as the Real Property List Judge or the Duty Judge either later that day or on Monday. Dr Townsend said that he was content with that course as ‘the court has heard from my learned friend that, as I understand, there is no intention [to deal with the property in the interim]’. The following exchange then occurred:
‘Pittavino: Your Honour, might I just be heard on one matter before proceedings adjourn. For an abundance of clarity, the intention not adversely to deal with the property was in description of correspondence sent by my instructors. I would not want [what I said] misconstrued as an undertaking to the Court to that end.
His Honour: You haven’t given an undertaking.
Townsend: I didn’t mean to suggest it was an undertaking. I’m simply saying the Court has heard what he’s said, I’ve heard what he’s said.
His Honour: That’s all right, and all you’ve indicated as I understand it, Mr Pittavino, is to point out what your solicitors had said to Mr Townsend’s solicitors?
Pittavino: Yes, your Honour.’
I am satisfied that in the course of this exchange Mr Pittavino clarified that his earlier statement was a reference only to what had been said in correspondence between the parties’ solicitors, being the statement in the letter dated 19 September set out earlier.
On 22 October 2025, Australia Successful Holdings Pty Ltd (ASH), of which the defendant is a shareholder, entered into a loan facility agreement with CEG Securities Pty Ltd (CEG) for a loan of $550,000. The defendant’s evidence is that the purpose of the loan is to fund the defence of proceedings commenced by the plaintiff against ASH to which the defendant has been recently joined as a defendant. The security for the facility includes a first mortgage over the Shelly Street property and a guarantee from the defendant. CEG has lodged the mortgage for registration.
It was submitted by Dr Townsend at the hearing before me that the defendant appeared to have misled the court at the hearing before Pike J on 17 October given that the application for the loan from CEG must have been made before 17 October. I do not accept that submission because as the exchange set out above makes clear, whatever ambiguity there may have been in Mr Pittavino’s earlier statement, he clarified that he was doing no more than describing what had been said in correspondence between the defendant’s solicitor and the plaintiff’s solicitor, and that correspondence merely stated that the defendant ‘currently has no intention of transferring, mortgaging or otherwise dealing with his interest in the property’.
As noted earlier, the summons does not seek final relief in respect of the interest claimed in the first caveat. However, in the other proceedings in this court brought by the plaintiff against ASH and the defendant, the plaintiff alleges that in late 2013 or early 2014 she and the defendant orally agreed that she would advance a sum of money to the defendant to enable the purchase of a rural property at Bendemeer, New South Wales, for the benefit of their family, on the basis that she would retain the beneficial interest in any surplus funds received by the defendant which were not used to purchase the property: see Amended Points of Claim filed 3 April 2025 in Proceedings 2023/00240398 (ASH Proceedings). The relief sought in the summons filed in the ASH Proceedings includes a declaration that the defendant holds the surplus funds on trust for the plaintiff. It appears that the surplus funds were in the order of $2.1 million and the allegation is that all or part of that amount was applied by the defendant to acquire the Shelly Street property. However, I note that the relief sought in the ASH Proceedings does not include a declaration (or other relief claiming) that the plaintiff has a beneficial interest in the Shelly Street property.
Section 74K(2) of the Real Property Act provides, relevantly, that the 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 [the] Court , or may make such other orders as it thinks fit…’
On an application for an extension of a caveat under s 74K(2) the plaintiff has the burden of establishing that (a) the ‘caveator’s claim has or may have substance’, which encompasses that there is a serious question to be tried as to the existence of the interest claimed in the caveat and (b) if so, the balance of convenience is in favour of the extension of the caveat until the dispute is resolved: Sutherland v Vale [2008] NSWSC 759; (2008) 14 BPR 26,255 at [11].
In relation to the first question, the interest claimed in the first caveat was a ‘life estate by virtue of beneficial interest in trust’. A ‘life estate’ is an estate in land for the life of the grantee or the estate for the life of another: B Edgeworth, Butt’s Land Law (7th ed, 2017, Thomson Reuters), [3.120]. In the present case, it would be inferred that the first caveat was claiming a life estate of the first kind. That wrongly describes the interest actually claimed which is a beneficial interest said to arise pursuant to an express, resulting constructive trust as a result of an arrangement whereby funds were advanced by the plaintiff to the defendant which were then used to acquire the Shelly Street property. For that reason, the first caveat suffered from a defect in that it misdescribed the interest claimed, which could not be cured under s 74L of the Real Property Act, and it would not have been appropriate to make an order under s 74K(2) to extend the caveat: ATF Group Pty Ltd v Melek [2023] NSWSC 333; (2023) 20 BPR 43,111 at [18]-[46].
Ultimately, the question whether an order should be made under s 74K(2) does not arise because the first caveat has lapsed under s 74J(1). This is because the lapsing notice was properly served on the plaintiff and the plaintiff failed to obtain an order under s 74K(2) extending the operation of the caveat before the expiration of 21 days after the date of service of the lapsing notice.
Presently before the court is an application under s 74O(2) of the Real Property Act for leave to lodge a second caveat. In order for leave to be granted under s 74O(2) for the lodgment of a second caveat following the lapse of an earlier caveat, it is necessary that the second caveat is ‘in respect of the same estate, interest or right and purporting to be based on the same facts as the first caveat’: see s 74O(1). The interest claimed under the proposed caveat (a beneficial interest under an express, resulting or constructive trust) is not the same as the interest claimed under the first caveat (a life estate) and accordingly the making of an order under s 74O is not necessary, nor does the court have power to make it.
As Palmer J said in FTFS Holdings Pty Ltd v Business Acquisitions Australia Pty Ltd [2006] NSWSC 846; (2006) 12 BPR 23,517 at [12]-[13]:
‘It will be seen that, in order for leave of the Court to be required for a second caveat, that caveat must be "in respect of the same estate, interest or right and purporting to be based on the same facts as the first caveat" (emphasis added). The wording in the two caveat forms as to the interest claimed or as to the supporting facts does not have to be identical to bring the second caveat within the purview of RPA s 74O; mere colourable variations in the wording of the two caveats will not be effective to circumvent the section: McCulloch v Fern (2000) 10 BPR 18,073 at para 7 per Hamilton J; see also Hastie & Benecke v National Australia Bank (1994) 7 BPR 15,116 per Handley JA. However, it must be clear from a comparison of the two caveat forms that it is “the same estate, interest or right” which is being claimed in both caveats. Likewise, it must be clear from a comparison of the two documents that essentially the same facts are being relied upon to support both claims for the same estate or interest: cf per Santow J (as his Honour then was) in Synergy Concepts Pty Ltd v Rylegrove Pty Ltd (in liq) (1997) 8 BPR 15,555.
That a second caveat is ineffective under RPA s 74O should appear fairly clearly from a comparison of what appears on the face of the two caveats. Where the two caveats claim distinctly different interests or rely upon distinctly different facts, the Plaintiff cannot show that s 74O has been engaged by taking the Court behind the face of the second caveat and demonstrating that the caveator relies upon the same underlying transaction as was claimed to support the first caveat. This is because the engagement of s 74O should be apparent to the Registrar General, who cannot go behind the face of the documents lodged in the same way as the Court can. The Registrar General should be able to see that, colourable variations in wording aside, the interests claimed in the two caveats are the same and the supporting facts relied upon are the same. The Registrar General must be able to see that the second caveat has been lodged without an order of the Court under s 74O(2)(a) or without an endorsed consent under ss (2)(b). If the Registrar General is satisfied from the face of the caveats lodged that the second caveat is ineffective under s 74O, the Registrar General may decline to record it or may, if it has been recorded, cancel it under RPA s 32(6), without any application to the Court under s 74MA being necessary.’
See also Woodsman Pty Ltd v Jozic [2018] NSWSC 1311; (2018) 19 BPR 38,649 at [18]; ATF Group at [49].
It will be apparent from a comparison of the first caveat and the second caveat in the form proposed that the estate, interest or right claimed in the second caveat is not the same in both caveats and consequently the second caveat will not be invalid under s 74O. If the plaintiff does lodge a caveat in the form proposed it will be open to the defendant to seek to have the caveat set aside under s 74MA. On that application, it would be necessary to consider the questions of whether there is a serious question to be tried and the balance of convenience: Hanson Construction Materials Pty Ltd v Roberts (2016) 93 NSWLR 1; [2016] NSWCA 240 at [77]-[79]. However, those questions are not before the court on this application.
In light of this conclusion, it is not necessary to consider the other submissions raised at the hearing.
For these reasons, the summons will be dismissed with costs.
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Xu
Chen [2025] NSWSC 1262
(2016) 93 NSWLR 1