Peter Palic is the registered proprietor of Lot 5 in DP 78649, a 30-acre market garden south of Wollongong. Peter has built up the business over many years, acquiring the necessary equipment for a productive farm. 

 

Peter is now in his late 70s. He wants to leave the farm business to his son David. Peter begins the process by arranging for his own solicitor, May Zhu, to transfer the land to David, who becomes the registered proprietor of 5/78649 on 1 January 2023. David suggests that to give his Dad some peace of mind about being able to stay in his own home, David should lease the land back to Peter. On 15 January 2023, David signs a document granting a lease to Peter for 20 years. 

 

 

In March 2023, David is approached by a neighboring commercial chicken farm, Space Eggs Pty Ltd, which wants to expand their operations. Space offers David $5 million for the land. David is torn between loyalty to his father, who he knows would not want the farm sold, and the profit he would gain from selling the land. Ultimately, he cannot resist the profit. David signs a contract to sell the land to Space Eggs for $5 million. 

 

As the date for settlement of the sale to Space Eggs gets closer, David becomes insistent that his father move into a retirement village. Peter resists, until David confesses to the sale. Peter is shocked. He calls May Zhu immediately and explains to her exactly what has happened. May asks Peter to send her a copy of the document David signed granting Peter a lease, which he does. May then lodges a caveat over 5/78649, prohibiting all dealings. It states that Peter has an interest in the following terms: 

 

Lease for 20 years pursuant to document dated 15 January 2023 

 

In anticipation of settlement, David has been busy selling farm equipment without his father knowing. He has orally contracted to sell a tractor and a bore water pump to Vesna Vito (bore water pumps pull water from aquifers below the ground). The bore water pump was bolted to a concrete slab and connected to an electricity supply, as well as pipes which reach deep into the ground. David had detached the bore pump back on 10 January with the intention of buying a new one for the farm. 

 

You work for Ms Zhu and she has asked you to tell her what rights you think Peter has to the land and the farm equipment.