Caveats Series Part 12: Incorrectly Identifying the Caveatable Interest in a Caveat and Section 74L of the Real Property Act 1900 (NSW)

Vikram MisraVikram Misra, Barrister at Clarence Chambers, continues his explanation around the importance of drafting caveats properly and the implications. To hear more from Vikram, follow his series here.


In my previous article, I outlined the use of section 74L of the Real Property Act 1900 (NSW) (“the Act”) in remedying defects of form in a caveat, for example, where there is an obvious mistake as to the name of the chargee.

But what about the situation where the caveatable interest specified in the caveat is not the correct species of caveatable interest as supported by the facts of the case? I.e. the caveator possesses a valid caveatable interest, but it is incorrectly identified in the caveat.

Take for example the following situation. A client comes to you after being served with a lapsing notice. The caveat currently lodged against the title of the property claims an interest by way of constructive trust based on contributions to the purchase price of a property. However, upon your expert analysis, you identify that the correct interest in the property is by way of charge under a loan agreement. Your client wishes to extend the caveat and seeks your advice on what to do.

The question here is, can s 74L of the Act be used to remedy this defect in the interest claimed in the caveat on an application to extend the caveat? The current judicial attitude towards the scope of the power under 74L of the Act favours a more restrictive view of its application. As such, in this example, the power under 74L of the Act would not be able to be utilised to remedy the defect in the wrong interest claimed, notwithstanding that a valid interest does exist. Nor does it seem that such a defect of substance can be overcome by orders amending the caveat.

In these cases, thought should be given to whether a fresh caveat that does not contravene s 74O of the Act (and which does not expose the client to a claim under s 74P of the Act) is lodged. Alternatively, injunctive relief may be more appropriate. These decisions are often hard to make under the strict time pressures involved after the service of a lapsing notice and should not be made lightly.

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. Vikram is also a contributing author to the Security of Payment (NSW) section of the looseleaf Commercial Arbitration Law & Practice Service for Thomson Reuters. You may connect with Vikram via email or LinkedIn

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