Caveats - how does someone remove a caveat (part 1)

When a caveat is lodged on a title to land, the consequences are severe: generally speaking, the registered proprietor is prevented from disposing of the land the subject of the caveat (see s91 Transfer of Land Act 1958 (Vic) (the TLA).

A person may seek to have a caveat removed by several means, including (by way of summary):

• by the Registrar issuing a notice requesting the caveator either to give notice abandoning the claim or  issuing proceedings to substantiate the claim (s89A TLA);
• by a person lodging a dealing on the title and 30 days have passed since the registrar gave notice to the caveator that the caveat will lapse (s90(1) TLA); or
• By application to the Court to have the caveat removed (s90(3) TLA).

This post and the discussion below concerns application to a Court under s90(3) TLA. Application to the Court is probably the quickest and most certain way to seek to have a caveat removed or substantiated. By way of observation, the provision by the caveator of a notice under s89A TLA that proceedings have been issued to substantiate a claim is not a very high hurdle, and will probably result in delay pending the determination of the proceedings.

s90(3) TLA is the key provision for the removal of a caveat. It provides as follows:

Any person who is adversely affected by any such caveat may bring proceedings in a court against the caveator for the removal of the caveat and the court may make such order as the court thinks fit. 

Normally an application for removal of a caveat is urgent. For instance, a caveat may prevent a settlement from occurring on a sale of land scheduled in a week's time. Because of the urgency of the situation, application to remove a caveat, under s90(3) TLA, is usually made by way of originating motion in Form 5C, together with a supporting affidavit, and a summons is issued to dispense of the requirement for the defendant to file and serve an appearance, under rule 45.05 of Chapter I of the Supreme Court (General Civil Procedure) Rules 2005 (the Rules).

Rule 45.05 of the Rules provides as follows:

(1) In this Rule plaintiff includes a person who proposes to commence a proceeding by originating motion. 

(2) The Court may by order- 

(a) dispense with the requirements of Rules 5.03(1) and 8.02; and 

(b) authorise the plaintiff to commence a proceeding by originating motion in Form 5C. 

(3) Without limiting paragraph (2), an order may be made- 

(a) in an urgent case; 

(b) to save time and expense for the parties; or 

(c) where the defendant consents. 

(4) An order may be made on application by the plaintiff before or after the proceeding is commenced and, except where the originating motion has been served on the defendant, application may be made without notice to the defendant. 

(5) An application made before the proceeding is commenced shall not constitute a proceeding for the purpose of any requirement of these Rules with respect to originating process. 

(6) Judgment shall not be given for the plaintiff for the relief or remedy sought in the originating motion or otherwise except on application made to an Associate Judge on notice to the defendant in Form 45A. 

(7) On application to an Associate Judge under paragraph (6) the Associate Judge may, as appropriate- 

(a) where the Associate Judge has authority to give the judgment sought by the plaintiff, hear and determine the application or refer it to another Associate Judge for hearing and determination; 

(b) by consent of the defendant, give the judgment; 

(c) refer the application to a Judge of the Court for hearing and determination; 

(d) place the proceeding in the list of cases for trial and give directions for the filing and service of affidavits or otherwise. 

Once the originating motion, affidavit and summons are filed with the Supreme Court of Victoria, the matter is then listed for hearing before an Associate Judge. Hopefully by the time the matter is heard before an Associate Judge, the originating motion, affidavit and summons are served on the defendant in accordance with the Rules.

Once the matter is before the Associate Judge, the matter is normally referred to a Judge of the Practice Court, either that day or on a later date. If there is time and the parties agree, orders can be made for the exchange of evidence and submissions before the trial of the matter. The Practice Court co-ordinator must be contacted before the referral to obtain a suitable date for hearing.

In terms of content, the originating motion needs to seek an order for the removal of the particular caveat from the title. If the plaintiff has suffered loss and damage by reason of the caveator lodging a caveat without reasonable cause, then the plaintiff may wish to include an order seeking compensation under s118 TLA. The plaintiff should include an order seeking costs and the usual catch-all of 'any order that the Court sees fit' or similar.

The affidavit really has to be as detailed as possible and include, at a minimum:

1. a copy of the title search for the property on which the caveat is registered;
2. a copy of the caveat which has been registered on the title;
3. a copy of any agreement or document referred to in the caveat of which the plaintiff is aware; and
4. the facts (in admissible form) which the plaintiff says makes the caveat unsustainable.

In my next post on this topic I will discuss the Court's considerations for the removal of a caveat.