Caveats are a fundamental feature of Australian property law. They operate as a protective mechanism to preserve claimed interests in land and to prevent dealings being registered without notice to, and in many cases the consent of, the caveator.

While the concept is straightforward, the practical and evidentiary requirements can be exacting. Lodging a caveat without a proper caveatable interest, or without adequate supporting material, may expose a party to removal applications and potential claims for compensation. This article outlines (1) what a caveat is, (2) what constitutes a caveatable interest, and (3) why supporting documents are critical—illustrated by a Queensland Supreme Court decision in which Spire Law acted for the respondent.

 

What Is a Caveat?

A caveat is a statutory notice recorded on a property’s title which—depending on its terms—prevents the registration of certain dealings affecting the land. The word “caveat” derives from the Latin caveat (“let him beware”), reflecting its function as a warning that another party asserts an interest in the land.

In practical terms, once a caveat is recorded, the Titles Registry will generally not register a dealing that is inconsistent with the caveat unless the caveat is withdrawn, lapses, or is removed by court order (or as otherwise permitted under the relevant legislation). Caveats are commonly used to protect equitable interests, including interests arising from contracts, trusts, or equitable charges.

 

What Is a Caveatable Interest?

A “caveatable interest” is the legal or equitable interest that justifies the lodgement of a caveat. It is not sufficient to assert a mere personal claim against the registered owner. The claimed interest must be proprietary in nature (or sufficiently connected to the land) and capable of supporting a caveat under the applicable statutory scheme.

Common examples include:

  • an equitable mortgage or equitable charge over the property;
  • a purchaser’s equitable interest under a contract for the sale of land;
  • a beneficiary’s interest under a trust; and
  • a lessee’s interest under a lease (including certain unregistered lease interests).

Courts dealing with caveat removal applications commonly consider whether there is a serious question to be tried as to the existence of the claimed interest, and where the balance of convenience lies pending determination of the underlying dispute.

 

Case Study: DT & MF Holdings Pty Ltd v Ascendia Accountants (Noosa) Pty Ltd [2017] QSC 330

The Queensland Supreme Court’s decision in DT & MF Holdings Pty Ltd v Ascendia Accountants (Noosa) Pty Ltd [2017] QSC 330 provides a detailed consideration of caveatable interests, particularly in the context of an alleged equitable charge.

In that matter, Ascendia Accountants lodged caveats over six properties to protect its claimed equitable interest. The caveats were founded on a charging clause contained in a Letter of Engagement signed by the applicants. The applicants sought removal of the caveats, contending that the purported basis for the caveats was not legally effective.

Key issues included:

  • whether the charging clause was capable of constituting an equitable mortgage or charge;
  • whether the caveats were validly lodged on that basis; and
  • whether the applicants’ arguments—such as the absence of a registrable mortgage for execution and alleged deficiencies in identifying the land—undermined the asserted interest.

The Court dismissed the application to remove the caveats, finding there was a serious question to be tried regarding the existence of an equitable mortgage/charge. The Court also noted factors relevant to the balance of convenience, including that the applicants had not paid money into court or provided an undertaking not to deal with the properties.

Spire Law acted for the respondent in successfully resisting the caveat removal application. The decision illustrates both the utility of caveats in preserving disputed property interests and the importance of careful drafting and evidentiary support.

 

Why Supporting Documents Matter

A caveat is only as strong as the interest it protects and the documents underpinning that interest. Supporting documentation should clearly articulate:

  • the nature of the interest claimed (for example, equitable charge, purchaser’s interest, trust interest);
  • the source of that interest (for example, contract, deed, charging clause, trust instrument); and
  • the connection between the interest and the particular land (including accurate identification of the affected property).

Key practical considerations include:

  • Clarity and precision: ambiguous drafting can invite challenge.
  • Legislative compliance: documents should satisfy any formal requirements imposed by relevant legislation.
  • Evidentiary coherence: the documentation should support a coherent, legally recognisable pathway from agreement/transaction to proprietary interest.

Deficiencies in supporting documentation may increase the risk of a caveat being removed and may expose the caveator to adverse costs consequences.

 

Risks and Strategic Considerations

Caveats can be highly effective, but they are not risk-free. Common issues include:

  • lodging a caveat without a proper caveatable interest;
  • overreaching (claiming an interest broader than the documents support);
  • allowing a caveat to lapse due to procedural non-compliance; and
  • responding inadequately to a lapsing notice or removal application.

When a caveat is challenged, the dispute often turns on both legal characterisation (what interest exists, if any) and evidence (what documents prove it).

 

How Spire Law Can Assist

Spire Law advises on the lodgement, maintenance, and removal of caveats, including urgent applications and complex property disputes involving equitable interests. The firm also assists with the preparation and review of documentation intended to create or secure interests in land, including charging clauses, security instruments, and related transaction documents.

For further information, contact Spire Law or visit our website.