Lodging a Caveat?

A caveat is a warning registered on the title to a property, warning anybody intending to deal with that property that the person who placed the caveat on the land claims an interest in it. The caveat can prevent any sale or mortgage, or it can prevent only particular kinds of transactions.

Caveats become relevant to family law because often at the end of a marriage one of the parties is worried, sometimes reasonably, that the other party may try to sell or dispose of property before the court can deal with it, and take the money and run.

Of course, you can't just lodge a caveat if you feel like it. You have to have what is known as a "caveatable interest", which means that you have to claim something the law will recognise as a right to the land and it has been established that a mere claim as a spouse is not sufficient to give a right to a claim to the land, as it is really a claim over all of the property of both parties to the marriage in a general sense and not attaching itself to any particular parcel of property.

In NSW, the system is that if the owner of the land gets notice of the caveat, he or she can give what is called a lapsing notice to the person who lodged the caveat. That forces the lodger of the caveat to go to court to hold onto the caveat, and if they do not then the caveat automatically lapses.

In a recent decision of Aurichhio and Auricchio, the Family Court considered an application by the husband in property settlement proceedings to remove a caveat lodged by the wife over property owned by the husband's company.

During the marriage, the husband and wife had developed several properties, using trusts and companies to do so. After the marriage broke down, the wife did two things: she lodged a caveat on at least one of the properties, and asked the Family Court for an order restraining the husband from dealing with several of the properties.

It is not clear why the wife wanted the caveat when she had already applied for orders restraining the husband from dealing with the real estate but the issue became the Family Court's power to deal with the caveat, where those matters are usually dealt with by the state courts. The husband argued that the wife did not have a caveatable interest in the property and the court should order her to remove it.

The issue then became within the reach of the Family Court, and whether this was something that could be dealt with by the Family Court under its ancillary powers.

The court found that if the husband could show that the matters relevant to the caveat consisted of the same basic facts as the rest of the case, and the same parties were involved, it was really the same controversy and the court did have power to deal with the caveat.

The court found that the wife did not have a caveatable interest, and ordered her to remove the caveat and directed the Registrar of Land Titles also to remove it.