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Welcome to The OMB Law Board, the podcast where legal insights meet practical advice. Hosted by Simon Bennett, Managing Partner at OMB Solicitors, this show delves into what you can expect when engaging with OMB Solicitors. Specialising in property law and commercial law, OMB also boasts dedicated teams for estate planning, contested estates, body corporate matters, litigation, and family law.
Each episode features in-depth discussions led by experienced team leaders, some with over 20 years of expertise. You'll gain valuable knowledge on initial consultations, cost assessments, timelines, and the importance of clear communication and confidentiality in legal matters.
Join us to break down barriers and navigate your legal journey with confidence. Tune in for expert advice, client stories, and tips on how to prepare for your legal needs. The OMB Law Board is your trusted source for all things legal.
"Welcome back to the OMB Law Board. I'm Simon Bennett and today I've got Samuel Layani from our litigation team. Samuel, welcome back to the podcast. Thank you. Thanks for having me again. So Sam, I'm going to intersect two worlds here. I want to talk about caveats.(...) That's right, caveats. And we're going to explain to you exactly what a caveat is. It's a term you may have heard. It's a very legal term. But it intersects really my area of property and your area of litigation. Absolutely.(...) Yeah, the two intertwine within each other. Yeah. So it's a caveat is a very property dominated tool because it deals with property but it is used extensively in litigation, debt recovery, protecting interest. Absolutely. Obviously the first part of a caveat is very property heavy and everything that comes after the lodgement of the caveat would then be very litigious and the way things happen and transpire after it. Okay. So let's dial it back. What is a caveat? A caveat is a document which is lodgment titles which invests in interests in a property.(...) So an individual might have a vested interest in a particular property so they'll lodge a caveat on title to assert such an interest in property. So one of the questions we get asked, particularly in the property team or not, is can I lodge a caveat? So how do I know when I can lodge one and when I can't? Well, it's a bit of a tricky question actually because it all stems down to what is your interest?(...) Do you have a vested interest in the property?(...) You need to also go behind. Is there a document that gives you a vested interest in a property? For example, did you sign a loan agreement, for example, and is there a personal guarantee within that loan agreement, investing all of your personal property in a, or giving a charge, for example?
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So that is a way in which you can determine if you have a capable interest. And that's the term, isn't it? But that's a term we often use is I've got to determine do you have a capable interest? And quite often that capable interest has to be a specific charge on the land. So a specific document usually which says, you know, I, Simon, charge all of my land to use SAM as security for the money you've laid me or for the provision of services or what have you. That's right. That's acceptable.
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So in all situations, including matrimonial, there might be a constructive trust or things like that. There's, it's quite a complex area which we won't delve into too much today. Other than I'll say this is if you want to know if you've got a capable interest, you need to ring a solicitor. You ring one of our team here at OMB and we will walk through what you've got and whether that constitutes a capable interest. Absolutely. You also don't want to take a step to assert you have a capable interest and in fact you do not. Because what happens if you don't? Well, you know, there's legal ramifications that will follow that. If you do lodge a caveat, someone can give you notice to commence a legal proceeding and within 14 days you have to do and commence a legal proceeding. And if you do not do that, your caveat will lapse. So you've asserted an interest in a property and that interest has now transpired. And if you didn't have a capable interest but you sought to lodge a caveat and that prevented me from doing something and I suffered loss and damage, then I, as the person lodging the caveat, would be entitled to pay that loss and damage or be required to pay that loss and damage.(...) You don't want to bark up the tree where you might render yourself in a position where you are suffering loss and damage or causing rather loss and damage to someone else because then that person can come after you for that particular loss and damage. And there's quite often an undertaking as to damages when you lodge this caveat that you will, you know, cover those costs if you're subsequently proven not to have that wrong. Ah, not successful, absolutely. Okay, so that gives us a little bit of a background as to what this caveat is. How does it work and what does it do when you lodge it on my property? So the way it works and when it's lodged on the title to the property is it'll come up as that there is a particular caveat with a dealing number and the way it works is it means that the person who owns the property or is the proprietor to the property can't deal with that property due to the caveat being that you can't refinance, you can't settle if you're going to,(...) through the conveyancing process and you have to deal with that caveat in the first instance before you can deal with your property in the way you wish to deal with it. So the notification or the registration of the caveat on title is a notification to the world that I have an interest in that property and that registered owner is now prevented from dealing with that property in any way so they can't sell it, they can't re-mortgage it, they can't lease it and register it, an interest, etc. So it's quite restrictive. It's very restrictive. Okay, and in a litigation sense, how is the use of these caveats becoming more prominent?(...) Well, in a litigation sense they are becoming prominent because,(...) especially in some recent examples where we've been dealing with large developments, they're asserting interests in a property and it's causing loss and damage to a developer, for example, then becomes an inflamed situation over a very small monetary sum and legal proceedings then are commenced and transpiring the costs far outweigh sometimes the caveat itself, the caveat of interest itself. So people are using it as a leveraging tool to recover a debt and preventing a much larger project in action. I think a method of exerting commercial pressure in circumstances where there might be a dispute between the parties and there has been an increasing number of caveats used in those circumstances to exert commercial pressure to push towards a resolution or obtain a settlement in respect of an issue that might be on a loan document, etc. And conversely, I guess, Sam, if you were acting for someone who was owed monies or
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compensation, for example, under an agreement which had been breached, that did give you the right to lodge a caveat. You could use that as a tool to assist in the recovery.(...) And how would you go about that? Well, first of all, if you needed the lodge a caveat or they thought you had a caveat of interest, you first of all take instructions from a solicitor to make sure you do have one and then you will obviously lodge your interest on title. But lodging your interest on title to the property, you have to be prepared to be met with a notice to commence a proceeding to assert your interest under that particular caveat to which you've lodged on title. So it's not just a matter of lodging a caveat, oh, okay, I've got my interest vested in that property. You have to be prepared to take the next step, the extra mile in commencing a legal proceeding to then assert the loss and damage that you might have suffered.(...) And a caveat in a general sense other than consent where it's given by consent, where I forcefully lodge a caveat in your property, it's got a time limit to it, doesn't it? That's right. So if you're giving notice, you've got 14 days to commence a proceeding or otherwise Let's roll that back.(...) So a caveat's a 90 days.(...) Sorry. So I'm talking about how long a caveat lapsed. Oh, right, sorry. A cap, not for the 90 days. The three months? Yeah, three months. Yeah, yeah, yeah. But I was going to say I know what you were going to get into. We'll talk about that. Okay. But let's get into the length of a caveat. Okay, start again. So I've asked the question.
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You can answer.
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Cavies lapse within 90 days, three months, and then they remain on title until they're removed. So obviously a caveat doesn't last forever. You said it's 90 days. Obviously if I start or commence an action with that, that can preserve it. That's correct. And there's other mechanisms to speed that 90 days up. Absolutely. So if you lodge or give notice rather,(...) they have to commence proceeding within 14 days. So I can shorten that back, right? You can shorten that period back from three months or 90 days back to 14 days. But something you have to also ensure is just because you've lodged a proceeding doesn't make it clear that your caveat is maintained on title. You have to give or deposit with the registrar notice that you have maintained that interest by lodging proceeding. So the notification of action?(...) Yeah, that's correct. Okay, so they're quite technical. Obviously we understand our listeners and viewers. Hopefully we've given you a little bit of an insight as to number one, what is a caveat, how it can be used either against you or how you can use it to enforce your rights. And your advantages. Absolutely. And Sam, you and the litigation team here at RMB are very knowledgeable and experienced in the use and defence of caveats. Yes, we've been dealing with them a lot lately and we've had some great success in using KVITS for individuals and also on the other spectrum as well. Getting them removed. Absolutely. Fantastic. Well, Sam, thanks so much for coming in and talking to us about this show. We really appreciate it. No, thanks for having me. And if you do have queries or questions about caveats, we do understand that they are very legalistic and you may need someone to help you navigate your journey either lodging a KVIT or having a KVIT removed from your title.
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Our OMB teams, both property and litigation, should be able to give you guidance along the way. And we look forward to seeing you again shortly on our next OMB Law Board.
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