week sixteen

Question 1

what sorts of terms and conditions can the court impose in a caveats proceeding

Answer 1

• that the caveat remain as long as the caveator consents to the registration of a certain instrument
• caveat lapse if they pay a certain amount of money into court
• that the order extending the caveat be refused but the caveator is granted leave to apply for another caveat to be lodged

Question 2

what is a court ordering undertaking as to damages for for caveats

Answer 2

the court can require a party to undertake (promise) to pay damages if it turns out they are required and the caveat shouldn’t have been lodged in the first place

Question 3

can a court vary an order than a caveat remain

Answer 3

yes - e.g. where the circumstances have changed

Question 4

can a caveator consent to the registration of an instrument

Answer 4

yes

Question 5

what is the rule under s 146 LTA 2017 about second caveats

Answer 5

if caveat has lapsed or been removed, no second caveat may be lodged by or on behalf of the same person in respect of the same interest, except by order of the High Court. if they withdrew it, they may lodge a second caveat themselves

Question 6

what must the court consider with an application to lodge a second caveat

Answer 6

• whether substance of interest in second caveat is the same as that claimed in the first
• very high threshold - order only made in exceptional circumstances
• caveator must establish a reasonably arguable case for the interest claimed
  considerations: strength of applicants case to support claimed interest, explanation for the failure of the caveator to exercise their rights under the lapsing provisions, whether unavoidable prejudice will be suffered by those who have acted in reliance on the register in the belief the caveator was not pursuing the claim

Question 7

does a second caveat rejoin at the same place of priority as the original caveat

Answer 7

no

Question 8

if a second caveat is lodged in contravention of s 146 LTA 2017, what would happen

Answer 8

• court will declare second caveat void

- cavetor may be liable to pay compensation under s 148 LTA 2017

Question 9

what are some examples of where a second caveat may be allowed

Answer 9

• original caveat defective
• caveator not at fault
• lawyer at fault

Question 10

under s 148 LTA 2017, a person or their agent who lodges a caveat against dealings without reasonable cause is?

Answer 10

liable to pay compensation to a person who suffers loss or damage as a result

Question 11

what must a party claiming compensation under s 148 LTA 2017 prove?

Answer 11

1. a caveat has been lodged by the defendant
2. the caveat was lodges without reasonable cause
3. the plaintiff has suffered loss or damage as a result

Question 12

who can claim compensation under s 148 LTA 2017 and who is liable to pay

Answer 12

a person who suffers loss or damage as a result of the lodgement of a caveat

a person or their agent who lodges a caveat without reasonable cause

Question 13

what does it mean for a caveat to be lodged without reasonable cause

Answer 13

“reasonable cause” is established where the caveator can show an honest belief on reasonable grounds that at the time the caveat was lodged, he/she had a caveatable interest. It is not necessary to show an actual caveatable interest

Question 14

what two points are involved in deciding whether there is reasonable cause in australian jurisprudence

Answer 14

1. a subjective element - existence of an honest belief on reasonable grounds of a caveatable interest; and
2. an objective element - existence of reasonable grounds for that belief

Question 15

what compensation may be allowed for caveats

Answer 15

compensation for any loss that can be fairly attributed to the wrongful lodgement of the caveat e.g. expense of removing the caveat (lawyers fees, land transfer office fees), interest paid to a mortgagee

Question 16

as per savill v chase holdings, when it comes to compensation around caveats, a claimant may have a duty to?

Answer 16

mitigate loss

Question 17

an instrument (e.g. caveat) has priority according to ?

Answer 17

the time when it is lodged, not when it is executed.

general rule: the person who is earlier in time is stronger in law provided the equities are equal

Question 18

the general rule is that the person who is earlier in time is stronger and law. how can this order be reversed?

Answer 18

onus is on the second equity holder to establish better equity

Question 19

what will the court consider when deciding whether to switch the order of equitable interests

Answer 19

• the whole picture (fairness and justice)
• failure to caveat
• delay in itself is not enough to affect the order of priority
• conduct of the parties after the second equity is created
• knowledge of first equity holder by second?
• treat overseas authorities cautiously

Question 20

what happened in Australian Guarantee Corporation v CFC Commercial Finance

Answer 20

one loan company didn’t register their loan so the other didn’t see it. the second company held the title. the first company lodged a caveat. they became aware of each other and the second party lodged a caveat.

court looked at first company’s (AGC’s) delay in registering its caveat, AGC’s action in not requiring title to the property. CFC’s delay in challenging AGC’s priority.

CA held: the combination of delay in lodging the caveat and failure to obtain title meant it was just and fair CFC’s interest should take priority (reversal) but AGC has a share of proceeds of sale in light of CFC’s acquiescence and delay

Question 21

what was the issue for the court in Taylor v Naera

Answer 21

whether Andrew has an arguable caveatable interest in the property as beneficiary of an interest pursuant to a constructive trust and whether, even if the interest Andrew claims is arguable, the Court should use its discretion to order the lapse of the caveat

Question 22

what happened in Taylor v Naera

Answer 22

Andrew contributed towards his mother’s first property with an alleged expectation between him and his mother, Mrs Taylor, that he would be repaid this at a later date. Auckland City Council acquired this property and Mrs Taylor moved to another property, which Andrew paid rates for, with another expectation of being repaid with interest. The council later relocated Mrs Taylor again, to a property in which Eva also lived. Eva agreed to pay $110,000 to her mother for this property in 1994, which was to be met by way of forgiving the entire amount except a contribution the council had required Mrs Taylor to pay to secure the right to acquire the property. Eva paid this and Mrs Taylor signed necessary documents to forgive the debt and balance in 2002. Andrew alleges that when Eva acquired her interest in the property, she also acquired the contributions on trust for him.

Question 23

what did Andrew have to show in Taylor v Naera

Answer 23

has the responsibility of demonstrating he has a reasonably arguable case for the interest he claims by providing evidence. if he is able to prove he is a beneficiary of a constructive trust, this will be caveatable.

to prove a constructive trust, Andrew must show he made a ‘more than minor,’ causally related to the acquisition and excess of any benefits of the arrangement direct or indirect contribution to the property, that he had a reasonable expectation of an interest in the property and that his mother would reasonably have been expected to have yielded the interest

Question 24

what was the result of Taylor v Naera

Answer 24

court acknowledged there was no point in the caveat standing in the way of the sale but Eva to pay $120,000 into Court to be hold on trust to provide security in the event Andrew succeeds in proving the interest he claims