Caveat

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FLAST REVIEW: Can my ex. put up a on property in a Family Law matter?

First of all the person lodging the caveat "The caveator" ought to be aware that if a caveat is lodged without reasonable cause the caveator may be liable for any loss caused by the caveat pursuant to section 118 of the Transfer of Land Act.

In a recent decision of a single judge of the Supreme Court, Justice James Elliot awarded the plaintiff indemnity costs on the basis that the defendant had lodged a caveat over the plaintiff’s property without a proper basis.

The award of indemnity costs is an adverse measure taken by Courts and unlike party-party costs its purpose is to ensure that the other party is not out of pocket (Spencer v Dowling & KL Dowling & Co (a firm) [1997] 2 VR 127). This means that all costs incurred by the other party will be allowed, save for any unreasonably incurred amounts.

If the other party seeks to remove the caveat, the caveator has 30 days to substantiate the caveat/s pursuant to section 89A if the Transfer of Land Act, the other option the other party has could involve removal of the caveat/s under section 90(3) of the Transfer of Land Act by way of an application to the court. In the case of a Family Law matter it would be heard in the Family Courts.

The case of Trevi & Trevi [2015] Fam CA 123 is an example of the way in which the Family Court of Australia has dealt with caveats lodged by a spouse over their former spouse’s property. In this case, the Husband was a partner of a law firm and the Wife was engaged in home duties. The Wife lodged caveats over three properties owned by the Husband during the course of proceedings. The Wife notified the Titles Office that she had a claim over the properties by way of “an implied or resulting or constructive trust”.

The Husband made an urgent application seeking that the caveats be removed. 

The Court found that a claim under section 79 of the Family Law Act 1975 (the Act) is not a caveatable interest. We advise that section 79 provides for how a Court alters the legal and equitable interests of parties in relation to property (real and personal). Justice Thornton noted the Wife’s concern that the Husband was accepting a new liability and may dispose of an interest in land to defeat her claim but made orders requiring the Wife to remove the caveats on the basis that the Wife did not claim an equitable interest in the investment properties and therefore she did not have a caveatable interest.

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.  In which case the caveat is for the amount claimed to have been paid by the caveator.

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).



Footnote Bibliography.

1. What to do when one party has control over all of the assets and liabilities in a marriage or de facto relationship.
2. Family law and caveats.
3. Lodging Caveats Over Property Without a Proper Basis.
4. Caveat forms.

 

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