Fam­i­ly law and caveats

Accord­ing to the Real Prop­er­ty Act, a per­son who claims a legal or equi­table estate or inter­est in land (‘caveator’) can lodge a caveat against the prop­er­ty of anoth­er (‘own­er’).

This usu­al­ly hap­pens in the con­text of sep­a­ra­tion when one par­ty is not reg­is­tered on the title and is fear­ful that the oth­er par­ty will sell or oth­er­wise deal with the prop­er­ty against their inter­ests, or if there is a sum of mon­ey owed to that par­ty by virtue of a Finan­cial Agree­ment or Court Order and wish to secure their interest.

Being in a mar­riage or de fac­to rela­tion­ship in itself does not give a caveator an inter­est in the own­er’s land to allow the caveator to lodge a caveat. A claim under the Fam­i­ly Law Act is not in itself a caveat­able interest.

A right to the pro­ceeds of sale of a prop­er­ty is also not a caveat­able inter­est. The caveat­able inter­est must be in rela­tion to the land itself and not the pro­ceeds of the land after it is sold.

This becomes more com­plex if the prop­er­ty is held by a com­pa­ny. Being a share­hold­er of a com­pa­ny in itself does not give rise to a caveat­able inter­est. Con­tribut­ing funds to a com­pa­ny towards the pur­chase of a prop­er­ty does not give rise to a caveat­able interest.

A Court Order allow­ing for the lodge­ment of a caveat does not in itself give rise to a caveat­able interest.

That is to say, if par­ties sep­a­rate and the caveator lodges a caveat with­out fur­ther jus­ti­fi­ca­tion to pre­vent the own­er from sell­ing or encum­ber­ing their inter­est, it is easy for the own­er to lodge a 21 day laps­ing notice, which will lapse the caveat after 21 days if no appli­ca­tion oth­er­wise is made in the Supreme Court (and grant­ed). The caveator is also like­ly to be liable for any costs incurred, and for lawyers, a poten­tial find­ing of pro­fes­sion­al misconduct.

What do I do then?

1. To effec­tive­ly lodge a caveat fol­low­ing sep­a­ra­tion, the caveator must show that they have an inter­est in the prop­er­ty as the result of an implied, result­ing, or con­struc­tive trust. For instance, the caveator must be able to show that he or she has in fact made con­tri­bu­tions direct­ly towards the prop­er­ty such as pay­ing a sum of mon­ey towards the mort­gage, or towards ren­o­va­tions. This does not stop the own­er from lodg­ing a 21 day notice; how­ev­er, if the caveator has a good argu­ment for this he or she will be more like­ly to suc­cess­ful­ly retain the caveat on the title when the mat­ter is heard. Alter­nate­ly the own­er is less like­ly to lodge such notice if he or she is aware that they have a weak case.
3. It is pos­si­ble, espe­cial­ly where lee­way is being giv­en to a par­ty to allow for delayed pay­ment, that an own­er will con­sent to the caveat being lodged on the title. The own­er can sign on the caveat doc­u­ment, that they agree to such lodge­ment. Alter­na­tive­ly, the own­er (as an indi­vid­ual, or as the sole direc­tor and share­hold­er of a cor­po­ra­tion) can allow a charge on the prop­er­ty in favour of the caveator to secure the out­stand­ing mon­ey owed, and can then lodge a caveat to secure said charge.

If the caveator does not have a caveat­able inter­est, then he or she should con­sid­er urgent­ly com­menc­ing an Appli­ca­tion in the Fam­i­ly Law Courts to seek injunc­tions (restraints on a par­ty doing cer­tain things e.g. sell or deal with real estate).

Sep­a­ra­tion is a stress­ful time, and par­ties can be made more stressed by deal­ing with such mat­ters. We encour­age you to seek legal advice as soon as pos­si­ble so as to under­stand how you can best pro­tect yourself.