week twelve

Question 1

what is a caveat

Answer 1

a block on the title which prevents the RO from having the ability to deal with their land

Question 2

are commercial leases registered in NZ

Answer 2

no, unless they’re for a very long time (like 99 years, but most are 3 - 6 years)

Question 3

what are the two ways a caveat can be used/applied in?

Answer 3

• as a matter of urgency when you see something is going to be done to stop this happening
• can be lodged and sit with many years without anything happening to protect the interest

Question 4

what does caveat translate to

Answer 4

‘let the person beware’

Question 5

are caveats registered

Answer 5

no, they are only a notice and are lodged rather than registered in the Land Registry Office

Question 6

what do caveats do

Answer 6

they protect existing proprietary rights and don’t improve them or create new rights

Question 7

what is a proprietary right defined as

Answer 7

“right to absolute ownership and the financial interest in private property at common law”

Question 8

what are the two effects of a caveat

Answer 8

1. provides a warning to those who search the record of title on the register that the caveator is making a claim
2. prevents action being taken in relation to the property until a party has been heard

Question 9

do you have a duty to lodge a caveat by having an equitable/unregistered interest? if you don’t lodge a caveat in these circumstances, does that imply an equitable claim does not exist?

Answer 9

no and no

Question 10

who can lodge a caveat against dealings

Answer 10

S138
someone who
- claims estate or interest in land whether capable of registration or not
- has a beneficial estate or interest in the land under trust
- is transferring the estate or interest to another person to be held on trust
- is the registered owner of the estate or interest in the land and has an interest distinct from that of the RO and established to the satisfaction of the Registrar that at the time the caveat is lodged there is a risk that the estate or interest may be lost through fraud

Question 11

what do S137, 138 and Gordon v Treadwell Stacey Smith say is needed for a caveat to be lodged

Answer 11

“there shall be an honest belief based on reasonable grounds that the caveator has an interest”

Question 12

what happened in Gordon v Treadwell Stacey Smith which established that there needs to be an honest belief based on reasonable grounds that the caveator has an interest for the caveat to be registered

Answer 12

Gordon purchased a property from C, there was a delay in the registering of the title. 6 months later, lawyers for C lodged a caveat against the property already sold by their client, claiming C had an interest as the vendor and alleged loses arising from delayed settlement.

Gordon sued the law firm for the caveat not being lodged on reasonable grounds. In the CA, they determined the principle in the question and the lawyers should have known this as the indefeasible title had passed. C had no equitable interest remaining

Question 13

what is the effect of a caveat being lodged on what the Registrar can do

Answer 13

the Registrar must not register or record anything that transfers, charges or prejudicially affects the estate or interest protected by the caveat

Question 14

what are the exceptions to the effect of a caveat being lodged where things can be done with the property

Answer 14

• where an instrument was accepted for registration before the caveat was
• if the RO died - has to go to executors
• if the RO is bankrupt - has to go official assignee
• court order overrides

Question 15

what is the exception to the blocking affect of a caveat with mortgagee power of sale

Answer 15

mortgagee can exercise power of sale over a caveat as long as:

• its exercised on a registered mortgage
• the caveat was lodged after the registration of the mortgage
• the estate or interest protected by the caveat must be dated later than the date of registration of the registered mortgage

Question 16

how can you lodge things like mortgages on a title with a caveat ?

Answer 16

by the consent of the caveator

Question 17

what are the two exceptions to challenge an indefeasible registered interest

Answer 17

fraud and in personam

Question 18

what are the principles to be applied when considering an application for an order that a caveat not lapse

Answer 18

• the onus is on the caveator to demonstrate they have an interest in the land sufficient to support a caveat (but they do not have to establish that definitely)
• must be a reasonably arguable case to support the interest they claim

Question 19

what did Mr Hitchcock need to prove get his interest in the property in Hitchcock v Murphy 2020

Answer 19

that he contributed in more than a minor way to the enhancement of the property in circumstances that both he and Ms Murphy must be taken reasonably to have expected that he would acquire an interest in the property as a result

Question 20

what did the court need to consider in Hitcock v Murphy

Answer 20

1. were Mr Hitchcock’s contributions more than minor
2. for what purpose were the works undertaken
3. what was the understanding between Mr Hitchcock and Ms Murphy about the contributions that were made and works undertaken

Question 21

what contributions had Mr Hitchcock made to Ms Murphy’s property

Answer 21

• repayment of mortgage ($147,000)
• funding of renovations ($2-300,000)
• clearing area where he lives ($108,000)
• work on first subdivision ($58,000)
• work on second subdivision
• advances for repayment of mortgage

Question 22

what was the result of Hitchcock v Murphy

Answer 22

the application was dismissed and an order was made for the caveat to lapse.

“I can see no circumstance from which an argument can be made that the applicant has a reasonable expectation to an interest in the property or that Ms Murphy can be reasonably expected to yield any interest to him”