In Homebuilding Pty Ltd v Litigation Fund WCX Pty Ltd [2026] NSWSC 423, Emmett J made orders for the withdrawal of a caveat lodged by WCX because the sensible construction of the deed purporting to give WCX an interest in Property was that the rights only arose on expiry of the term of the advance. His Honour also made orders for the appointment of receivers based on a charge securing debts under a building contract which survived termination.
Case Background
In September 2017 Homebuilding entered into a building contract with the Cappellos for works at their property in Haberfield. In January 2019 the Cappellos commenced proceedings against Homebuilding for damages and defects. Homebuilding cross claimed for unpaid amounts. In August 2020 Homebuilding obtained judgment against the Cappellos for $76.5k plus indemnity costs, but these were reduced on appeal to $50.1k. In March 2021 Homebuilding lodged its first caveat over the Property. Homebuilding took steps in various courts to enforce judgment and costs orders. The first caveat lapsed and a second caveat was lodged in March 2023. In October 2023 the Cappellos entered into a deed with WCX by which it was advanced $500k secured by a charge over property. In July 2024 WCX filed a notice to sheriff of disputed property. In May 2025 WCX lodged a caveat asserting an interest under the deed. Homebuilding attempted to register a writ for the levy of property but was prevented by WCX's caveat. In July 2025 Homebuilding commenced proceedings against WCX seeking orders for the withdrawal or lapsing of WCX's caveat.
Survival?
The contract included a charge in respect of all moneys payable or becoming payable under the contract, and an obligation to pay debt collection costs. But these costs accrued after the contract was terminated and were only picked up if the clauses survived termination, which was not express so Homebuilding had to establish it envisages a post recission state of affairs and is in no way abrogated by termination. This question was one of construction in that the contractual promise to pay continues after termination. Approaching the question by asking what a reasonable person would understand, and taking into account the commercial reality of debt collection and the structure of the contract, his Honour found that it did survive.
Outcome
His Honour held that WCX did not have a caveatable interest in the property. The deed secured the advance payment by way of charge over all real or personal assets. The date for repayment was October 2028. This literal words of the change meant the Cappellos could not dispose or dealing with any real or personal property without WCX's consent, including spending any money or giving gifts. Given the impracticability of the charge the practical approach is to recognise the significance of the repayment date meaning that WCX does not have any right in relation to any property until expiry of the term. Accordingly WCX had no interest in the Property capable of supporting the caveat.