Caveats are often the subject of litigation and can be a major disadvantage if you find yourself wanting to sell or develop your property, but cannot, because someone has a caveat over your property.
What is a caveat?
A caveat restricts a property from being sold or dealt with and informs others of an interest against the property.
What to do if you want to remove a Caveatable Interest?
A caveatee (that is, the person whose interest a caveat is entered or filed) may apply to the Court to seek that a caveat is removed from their property.
In such circumstances, the caveator (that is, the person who filed the caveat) bears the onus to demonstrate that it has a genuine arguable case. It does this by satisfying the Court that it “has an interest of the kind asserted in the caveat”.1 This is a relatively low threshold.
Once a genuine arguable case has been established, the onus will remain on the caveator to “show that the balance of convenience favours maintenance of the caveat”.2
Several Queensland judgements have identified various relevant factors in determining the balance of convenience.3 These include:
- The amount claimed as a proportion of value of land the subject of caveat;4
- Whether alternative security is offered;5 and
- Whether the caveat is too wide – that is, whether it goes beyond what is necessary to protect the caveator’s interest.6
Provision of Substitute Security
One of these factors the Courts have identified is whether alternative security has been offered.7
The presiding judge in Australian Property & Management Pty Ltd v Devifi Pty Ltd8 stated:
“[T]he Court has said in cases such as Martyn v Glennan that it will not allow caveats, even if they are legitimate caveats, to oppress the registered proprietor unduly. The Court does not live in some commercial vacuum. The Court knows that the mere presence of a caveat may prevent a whole series of bona fide commercial transactions taking place and if a case gets into that sort of area the Court will be extremely careful as to whether the caveat should be retained. An example is Re Clements Caveat [1981] Qd R 341. If in such a circumstance a substitute security can be given then the Court is often minded to order that the caveat be removed.”9
Amount Required
The general proposition is that the amount of substitute security that should be offered is the amount that is claimed by the caveator. However, in certain circumstances, additional security may be required to convince a Court that a caveat should be removed.
Disclaimer
The information contained on this website is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved.
Accordingly, the information on this site is provided with the understanding that the authors and publishers are not providing legal advice. As such, it should not be used as a substitute for consultation with professional legal advisers. Before making any decision or taking any action, you should consult with a professional lawyer from Rouse Lawyers.
Liability Limited by a scheme approved under Professional Standards Legislation.
1Green v Scottney-Turbill [2022] QSC 65.
2Buchanan and Anor v Crown and Gleeson Business Finance Pty Ltd [2006] NSWSC 1465 at [6], followed by Ross Cook and Brett Cook Pty Ltd v Bli Bli #1 Pty Ltd [2009] QSC 300 at [19].
3Ross Cook and Brett Cook Pty Ltd v Bli Bli #1 Pty Ltd [2009] QSC 300 per Martin J at [21].
4Re Burman’s Caveat [1993] 1 Qd R 123.
5Re Burman’s Caveat [1993] 1 Qd R 123.
6Queensland Estates Pty Ltd v Co-Ownership Land Development Pty Ltd [1969] Qd R 150 at 155-156.
7Re Burman’s Caveat [1993] 1 Qd R 123.
8[1997] 7 BPR 15,235.
9at 15,257.