Vikram Misra, Barrister at Clarence Chambers continues his series into caveats as he discusses the lodgment of caveats for contributions made to property and the Property (Relationships) Act 1984 (NSW). To hear more from Vikram, follow his series here.
A claim to an estate or interest under the Property (Relationships) Act 1984 (NSW) (“the Act”) is not itself a caveatable interest. This is because a caveat “cannot be lodged to protect what is merely a claim to exercise a cause of action”.[1] Practitioners should therefore look for other valid basis to lodge the caveat, or perhaps seek an injunction to preserve the status quo, pending the determination of the client’s interest in the property.
In Ryan v Kalocsay [2009] NSWSC 1009, Slattery J considered whether the caveator held a valid caveatable interest in the subject property claiming, “an interest in the property pursuant to s 20 of the Property (Relationships) Act 1984.” This was alleged to be supported by virtue of the following facts:
The caveator has been in a de facto relationship with the registered proprietor for 10 years, has made substantial contributions to the property and claims an interest pursuant to s 20 of the Property (Relationships) Act 1984.
His Honour held at [9] that, “where a caveat merely claims an interest in property which will be declared or ordered as a result of a fully adjudicated claim under the Property (Relationships) Act 1984 (NSW) or under the Family Law Act 1975 (Cth), the courts have consistently found that a caveatable interest is not established.” The doctrinal basis militating against the existence of a valid caveatable interest was supported in the following manner:
A caveat must be supported by an equitable interest in land present at the time the caveator lodges the caveat. It is insufficient that it has some potentially enforceable right against the registered proprietor, which has not yet ripened into an interest. In Porte v Couso [1984] ACL Rep [355 NSW 19] McLelland J in the NSW Supreme Court held that the provisions of the De Facto Relationships Act 1984 did not give rise to any interest in property until such time as an order was made under that Act conferring such an interest. Similarly, until a declaration under the Property (Relationships) Act 1984 is made, the plaintiff has no equitable and caveatable interest in the Riverstone Property as his interest in merely a potential one.
No caveatable interest arises from mere cohabitation as the right. In Morling v Morling (1992) 16 Fam LR 161, it was held that a caveat lodged claiming an interest under the De Facto Relationships Act 1984 (the precursor to the Property (Relationships) Act 1984) could not be supported “for such a “claim” is merely a claim to exercise a mere right of action, and does not give rise to an equitable interest in the subject property”.
The key takeaway from this is that, when considering lodging a caveat for contributions made to property in circumstances that may fall under the Act, it would be wise to consider other basis to support an interest in the property, for example a constructive trust. Alternatively, seeking an injunction restraining the registered proprietor from dealing with the property pending final determination of the interests in the property can provide adequate protection.
[1] Vo v Nguyen [2014] NSWSC 1622, [16]. See also: Peter Butt, Land Law, (6th ed 2010, Lawbook Co) at [20.28].
Vikram Misra was admitted as a solicitor in 2012 and called to the NSW Bar in 2015. He maintains a broad commercial practice and is regularly briefed in matters relating to taxation law, property law, construction law and equity. Vikram has completed a Graduate Diploma in Taxation Law at the University of Sydney in 2015 and a Master of Laws majoring in construction law and contract law at the University of Melbourne in 2016. You may connect with Vikram via email counsel@vikrammisra.com or LinkedIn 
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