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M2 Assets PTY LTD as trustee for the M2 Assets Trust vs. Turco - (25 Feb 2022)

A caveatable interest must exist at the time a caveat is lodged, a caveat cannot be lodged to protect a future interest


In present case, on 18 February 2022, the Plaintiff, M2 Assets Pty Ltd, filed an originating summons seeking an order pursuant to Section 138(2) of the Transfer of Land Act 1893 (WA) for the removal of caveat lodged by the first defendant on 2 February, 2022 over a property. On the same date, the Plaintiff filed a chamber summons for an urgent interlocutory injunction to seek removal of the caveat and an order that the first defendant be restrained from lodging any further caveat over the property.

A caveat is a form of statutory injunction which prevents registration of a dealing against land until the caveator has been given a reasonable opportunity to justify the caveat by pursuing such remedies as they may have. The caveator must satisfy the court that, on the evidence presented to the court, their claim for an interest in the property raises a serious question to be tried or whether it may have substance. Even if a claim may have substance, the caveat might not be extended having regard to factors including the apparent strength or weakness of the caveator's claim. A caveat will not be removed unless the claim to an estate or interest in the land appears to be without foundation.

On an application to extend the operation of a caveat, the balance of convenience is a factor to be considered. Interlocutory removal of a caveat, however, will be unusual where an arguable case as to the existence of a caveatable interest has been demonstrated. That is because the purpose of a caveat is the protection of a proprietary interest. Removal of the caveat will, in many cases, have the effect of destroying the benefit of the proprietary interest claimed in the caveat.

A caveatable interest must exist at the time a caveat is lodged. A caveat cannot be lodged to protect a future interest. The caveat must not go beyond the legitimate claim necessary to protect the rights of the caveator. There is limited power for the court to allow the terms of the caveat to be amended. It may be amended to enable the caveat to better and more fully express the interest that is claimed. However, amendment is not permitted to alter the interest claimed to claim a different interest. Although there are conflicting authorities, it has been held that a registered proprietor may, in limited circumstances, lodge a caveat to enjoin the registration of a particular dealing or particular kind of dealing.

Mr. Turco's description of the estate claimed is not capable of amounting to a legal or equitable estate or interest in the land. It is not clear from the description in the caveat, or the statutory declarations in support of the caveat, as to the nature of the interest in the Property that is claimed by Mr Turco. Mr. Turco does not in his statutory declaration or caveat challenge the proposed sale of the Property as being a voidable transaction nor the agreements which give rise to the plaintiff's right as mortgagee on default to enter into possession and exercise rights of sale. Mr. Turco has failed to demonstrate that, he may have a claim to an estate or interest in the Property and the caveat should be removed.


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