An issue which often arises for consideration is whether a registered proprietor should issue a lapsing notice or seek the withdrawal of the caveat under s 74MA of the Real Property Act 1900 (NSW) (Act). The answer is based on the urgency required to have the caveat removed. 

If a lapsing notice is issued by the registered proprietor, then the caveator has 21 days from the date of service to seek an extension of the caveat, otherwise the caveat lapses. The caveator approaches the court to extend the caveat and bears the onus of proof in persuading the court to extend the caveat. I have adopted the phrase - the caveator moves and the caveator proves” , to summarise the extension of caveat procedure. This procedure is appropriate where there is no urgency for the caveat to be removed, or to put it another way, if the removal of the caveat can wait 21 days. 

On the other hand, if there is urgency to have the caveat removed, then the appropriate procedure to be adopted is for the registered proprietor to approach the court and seek the withdrawal of the caveat under s 74MA of the Act. Although the registered proprietor brings the withdrawal application, the onus is still on the caveator to persuade the court that the caveat should remain on title. I have adopted the phrase - “the owner moves and the caveator proves”  to summarise the 74MA procedure.

Naturally, issuing the lapsing notice to remove the caveat is the “cheaper” way to remove the caveat, however it is only cheaper if it results in the caveat lapsing without an extension of caveat application being made by the caveator. Legal costs will be incurred by the registered proprietor in both defending an extension of caveat application and in bringing a withdrawal application under s 74MA of the Act. Whether those legal costs are recoverable and the scale at which they are recoverable depends on inter alia, the way the proceedings have been conducted and the outcome. 

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        Vikram Misra

Vikram Misra, Barrister at Clarence Chambers, 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 Domestic Arbitration, International Arbitration, Security of Payment (NSW) and Security of Payment (SA) sections of the looseleaf Commercial Arbitration Law & Practice Service for Thomson Reuters. You may connect with Vikram via email or LinkedIn