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Caveats and Family Law

08/02/2021

In New South Wales and all other States of Australia there is legislation which provides a procedure for a person who has an interest in real estate to protect that interest.  The need to protect your interest usually arises when a person is not the Registered Owner of the land but their spouse or partner is the Registered Owner.

In many Family Law matters (when separation occurs), the real estate is not registered in both the parties’ names and is registered in the name of only one of the spouses or partners.  This circumstance can expose a person to a risk that the property might be sold without their knowledge or that Mortgage debt secured over the property is increased without their consent and knowledge. 

The Real Property Act NSW 1900 allows for lodgement of a Caveat on title to real property.  The lodgement of a Caveat on title will prevent settlement of the sale of property for so long as the Caveat is valid and remains on title.  The Caveat will also prevent registration of a new Mortgage but will not prevent an increase in borrowing to an existing Mortgage.  Further borrowing may be able to be achieved unless a Court makes an Order called an Injunction which prevents such action. 

When Can a Caveat be Lodged?

In New South Wales the Real Property Act 1900 provides (Section 74F) that any person who by virtue of any unregistered dealing or by devolution of law or otherwise claims (on a valid basis) to be entitled to a legal or equitable estate or interest in the land may lodge with the Registrar General, a Caveat prohibiting the recording of any dealing affecting the estate or interest to which the person claims to be entitled. 

It is essential that when a Caveat is lodged that the interest claimed is a caveatable interest which will not be able to be challenged.  The fact that there is a marriage or a de facto relationship does not of itself, create a caveatable interest. 

It is not uncommon for a person to lodge a Caveat in circumstances where there is no entitlement to lodge that Caveat.  Merely having a claim against the other person is not a caveatable interest.  Lodging a Caveat that does not disclose a caveatable interest may have significant adverse costs implications for the person who has lodged a Caveat improperly. 

Being married to the Registered Proprietor of a property or being in a de facto relationship with the Registered Proprietor does not automatically give a person a caveatable interest in land. 

The caveatable interest must be in existence at the time the Caveat is lodged and not merely a potential and future interest as might arise after the determination of Family Court or Federal Circuit Court proceedings.

Lapsing of Caveat

If there is no caveatable interest the Registered Proprietor can take steps to remove the Caveat.  The Registered Proprietor can make an Application to the Registrar General for the issue of a Lapsing Notice.  That Lapsing Notice is then served on the Caveator.  The Caveator must then make an Application to the Supreme Court to obtain an order from the Supreme Court allowing the Caveat to remain on title.  If the Court does not find that there is a caveatable interest, then the Caveat will not be maintained and will be removed from title.  There are the provisions within the Real Property Act that prevent a person (the Caveator) lodging another Caveat claiming the same interest in land.  This is a costly procedure. 

What is and What is Not a Caveatable Interest?

The mere fact of marriage or de facto relationship is not a caveatable interest.  Careful consideration of the facts of each matter is required before lodging a Caveat. 

There are caveatable interests such as:

  • The existence of an implied Trust;
  • The existence of a resulting Trust; or
  • The existence of a constructive Trust. 

These interests might exist in cases where a person made contributions to the acquisition of the property or payment of the Mortgage.  Watson & Watson have expertise in identifying caveatable interests and ensuring that the Caveat can be maintained. 

Injunctions under Family Law Act 1975 

In the absence of a caveatable interest the proper course is to seek relief in the Family Court rather than lodge a Caveat.  The Family Law Act 1975 (s114) provides the Court with power to make injunctions. 

If there is no caveatable interest, then the appropriate course is to file an Application in the Family Court and ask the Court to grant an injunction. 

The Court may make such Order or grant such injunction as it considers proper with respect to the matters to which the proceedings relate, including:

  1. an injunction for the personal protection of a party to the marriage;
  2. an injunction restraining a party to the marriage from entering or remaining in the matrimonial home or the premises in which the other party to the marriage resides, or restraining a party to the marriage from entering or remaining in a specified area, being an area in which the matrimonial home is, or the premises in which the other party to the marriage resides are, situated: 
  3. an injunction restraining a party to the marriage from entering the place of work of the other party to the marriage;
  4. an injunction for the protection of the marital relationship;
  5. an injunction in relation to the property of a party to the marriage; or
  6. an injunction relating to the use or occupancy of the matrimonial home. 

At Watson & Watson our experienced Senior Family Lawyers can assist in relation to all aspects of property/financial settlement to protect to your interest and to achieve the best outcome for you.  Please contact Richard Watson Senior Family Lawyer or Shereen Da Gloria his Personal Assistant to discuss your matter and seek timely advice.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.

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