Caveat Disputes:

Disputes involving caveats are a subset of the law of property and cross over into the law of equity as well. Litigation involving caveats and caveatable interests can either be simple or very complex. Simple cases usually concern caveats over property which is used as some form of security for a debt or loan. Complex cases may involve situations where the interest on which a caveat is registered is in face caveatable, or where the loan itself is in question. In these cases, documents may need to be adduced which can evidence any agreement from which the caveatable interest arises. It is often the cases that such agreements are verbal, and this adds to the complexity of the problem. The general principles relating to the laws of contract may be of use here when determining the relevant legal issues in dispute. 

A caveat solicitor or a lawyer who is retained to deal with a legal dispute concerning caveats will therefore need to have the broad experience necessary to be able to perceive possible problem areas when considering a case for litigation. Disputes involving caveats may therefore involve processes that are connected to civil litigation as well as commercial litigation. The commercial litigation aspects may become more readily apparent where the caveat is somehow connected to a business or some commercial enterprise. The property may be part of a business, or the loan (the unpaid debt of which is secured by the caveat) may be for a business purpose, for example. The civil litigation aspects of the caveat may be connected to a personal dispute between parties who claim ownership of the property or part of the property. It is not unusual for a dispute concerning a caveat to have elements of both commercial and civil litigation in common. 

Some of the general issues and questions that arise in caveat disputes can include the following: 

• Is there a caveatable interest?
• Was consideration necessary for the caveat?
• Was the consideration for the caveat sufficient, or was there some failure of consideration?
• Was consent required for the caveat?
• Was this consent obtained properly?
• Is there a dispute of priorities between caveats?
• How is the caveat to be removed?
• Was the security sufficient?
• Contractual interpretation.

A dispute of priorities between caveats will be determined according to equitable principles and property law. This usually involves a claim of right to have the value of the caveat secured first in line of a series of caveats. Interest in property can be legal or equitable, and there are rules in relation to which interest takes precedents over which other interest: whether it is legal against legal, legal against equitable, or equitable against equitable. Some exceptions apply in certain circumstances, but these need to be ascertained by a competent caveats property layer before action can be taken in Court.

If consideration is required for the caveat, and if that consideration has failed, it is likely that an element of trust law may be relevant to resolving this dispute. This too will have to be investigated in detail before any action is taken. Disputes involving failed consideration may be fact heavy, and where there is not written contract, may well revolve around testimonial evidence in the form of affidavits, statements and declarations. These are sensitive matters and must be approached with caution. Where there is not written contract evidencing any agreement, inferences can be made from the testimonial evidence and the conduct of the parties.

Where there is a caveat on a property, generally that property cannot be sold or otherwise disposed of for value. An individual or a business which has a claim against the vendor of property can lodge and register a caveat over that property until the account has been settled between them. Often, the account is itself in dispute and the vendor will wish to remove the caveat so that the property can be transferred. Situations like these may require legal advice from a civil litigation lawyer who has had experience in commercial litigation because there may be issues in dispute that bridge both areas of legal practice. Likewise a commercial lawyer with civil litigation experience will be in a position to consider the case from a different perspective and therefore provide in depth analysis of the pending litigation. 

If you require assistance with a caveat litigation matter you may wish to contact our firm by telephone on (02) 9233 4048 or email at info@navado.com.au and make an appointment to see one of our solicitors. 

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.