plaintiff. Order that the Registrar remove caveat No. AB 916344E from Vol. 10705 Folios 180, 181, 182, 183 and 184; injunction restraining the first defendant from lodging any further caveat claiming interest...
Key principles
Section 91(4) of the Transfer of Land Act 1958, which provides that 'A caveat that has lapsed or been removed shall not be renewed by or on behalf of the same person in respect...
A second caveat lodged by the same person in respect of the same interest where a prior caveat had been withdrawn or removed is impermissible and, in the circumstances of this...
The defendant did not establish an arguable (serious) case that he possessed a caveatable interest in the land; there was no serious issue to be tried on the substantive merits,...
Lodging a second caveat in these circumstances amounted to lodging a caveat without reasonable cause; the Court exercised its costs discretion to award indemnity (solicitor and...
Issues before the court
Whether s 91(4) of the Transfer of Land Act 1958 prevents a person from lodging a second caveat in respect of the same interest after a prior caveat...
Plain English Summary
The Court held that a person who has caused a caveat to be withdrawn or removed cannot re-lodge a caveat over the same interest: 'removed' in s 91(4) includes withdrawal by the caveator. The defendant's second caveat was therefore impermissible and the Court ordered its removal, granted an injunction preventing further caveats, found the defendant had no arguable caveatable interest, and awarded indemnity costs to the plaintiffs.
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Deep Dive
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What happened
This was an application to remove a caveat under the Transfer of Land Act 1958 (Vic). The plaintiffs, R & L Bell Pty Ltd and another, sought removal of a caveat (lodged 12 August 2002) which had been registered against five parcels of land in a subdivision formerly known as 29 Murray Street, Anglesea ([2]). The defendant, Mr Casboult, had previously lodged an identical caveat over the land prior to subdivision; that earlier caveat had been the subject of a separate proceeding between the same parties and was withdrawn as part of a compromise in which the defendant agreed to withdraw and pay the plaintiffs’ costs ([5]). Despite that history, the defendant lodged a second caveat following subdivision.
Whether the defendant had an arguable caveatable interest in the land sufficient to justify the caveat.
Whether indemnity (solicitor and own client) costs should be awarded against the defendant for lodging the second caveat.
Cited legislation
6 cited instruments linked from this judgment.
The plaintiffs applied under s 90(3) of the Transfer of Land Act 1958 for removal of the second caveat ([2]). A preliminary point of law raised by the defendants was whether s 91(4), which states, in full, 'A caveat that has lapsed or been removed shall not be renewed by or on behalf of the same person in respect of the same interest', prevented the re-lodgement of a caveat by the same person where a prior caveat had been withdrawn ([8], [24]). The Court had to consider the statutory wording and the circumstances, and, in the alternative, whether the defendant could show an arguable caveatable interest sufficient to sustain the caveat ([49]).
Bongiorno J concluded that 'removed' in s 91(4) encompassed withdrawal by the caveator as well as removal by court order, that the second caveat should never have been lodged and must be removed, and that the defendant had no serious issue as to a caveatable interest. The Court ordered removal of the caveat, an injunction restraining the defendant from lodging further caveats claiming any interest in the specified folios, and indemnity costs to the plaintiffs ([40], [70], [88]).
Why the court decided this way
The Court’s decision turned on statutory interpretation and on the factual insufficiency of the defendant’s asserted interest.
Statutory interpretation of s 91(4)
The key textual provision was s 91(4): 'A caveat that has lapsed or been removed shall not be renewed by or on behalf of the same person in respect of the same interest' ([8]).
The Court traced the provision’s history back to the Transfer of Land Statute 1866 and subsequent consolidations, observing the similarity of language across historical enactments and noting the 1979 Amendment which moved the provision to s 91(4) ([15], [19], [24]).
Mr Dickensen (for the defendant) argued that the 1979 re-drafting, and the use of the words 'lapsed or been removed', indicated a distinction between removal by court order or lapse (by effluxion of time) and voluntary withdrawal by the caveator. The Court rejected this distinction as a basis for allowing re-lodgement: the judge concluded that 'removal' is an encompassing word capable of including withdrawal by the caveator because in both withdrawal and court-ordered removal the Registrar's cancellation is what causes the caveat to cease to be in force ([29], [35]).
The Court relied on the practical mechanics: registration/binding effect arises from the Registrar’s entry; cancellation by the Registrar follows a prior act (withdrawal or order), therefore 'removal' logically covers withdrawal as well ([35]).
Lack of an arguable caveatable interest
Independently from the statutory point, the defendant's asserted agreement was examined. The Court found the defendant’s affidavit assertions to be conclusory and the documentary evidence insufficient to support an agreement giving the defendant an interest in the land ([49], [52], [55], [58]).
The correspondences and the faxed summary relied upon did not disclose contractual terms that would create a proprietary or other caveatable interest; the Court found no serious issue to be tried on the merits ([61], [64]).
Costs
Because the second caveat had been lodged in circumstances where it was impermissible under the Court’s reading of the statute and because the defendant had insufficient basis to support a caveatable interest, the Court held the caveat was lodged without reasonable cause and ordered indemnity costs against the defendant ([79], [82], [88]). The Court noted s 118 of the Act provides for compensation for unreasonably lodged caveats but held an indemnity costs order could be made as an exercise of the Court’s ordinary discretion ([85]).
Before and after state of the law
Before:
The statutory provision prohibiting renewal of a caveat by the same person 'in respect of the same interest' had been longstanding in Victorian Torrens legislation (dating back to 1866), although prior formulations used the words 'the same estate or interest' ([15]). Earlier authorities had sometimes addressed whether a second caveat claimed the same estate or interest but did not squarely decide whether withdrawal by the caveator left open re-lodgement. Tadgell J in Sinn had stated that the provision had been moved without alteration to its terms ([24]), though that case dealt with a different question.
What this judgment clarified:
Bongiorno J explicitly held that the statutory phrase 'lapsed or been removed' includes withdrawal by the caveator; the consequence is that a caveator who has caused a caveat to be withdrawn or removed cannot re-lodge a caveat in respect of the same interest ([35], [40]). This closes any practical loophole where a caveator might withdraw a caveat to avoid the 'renewal' prohibition and then re-lodge an identical caveat.
After:
The practical legal effect is emphasised: re-lodgement by the same person as to the same interest after prior withdrawal/ removal is impermissible; where a second caveat is lodged in such circumstances the aggrieved proprietor may obtain removal under s 90(3) and seek a prohibitory injunction against further caveats, and the Court may award indemnity costs where the second caveat was lodged without reasonable cause ([40], [70], [88]).
Key passages with plain-English translation
Statute quoted (para [8]):
Text: "(4) A caveat that has lapsed or been removed shall not be renewed by or on behalf of the same person in respect of the same interest."
Plain English: If a caveat has expired or has been taken off the register, the same person cannot register another caveat for the same claimed right in relation to the same interest.
Court’s interpretive conclusion (para [35]):
Text: "It seems to me that the word 'removal'... is an encompassing word which can mean removal by order of the Court, or removal by the act of the caveator in withdrawing the caveat."
Plain English: 'Removal' covers both situations: when a judge orders a caveat to be taken off and when the person who put the caveat on decides to withdraw it.
Final determination on the statutory point (para [40]):
Text: "It follows that I do not accept the argument of Mr Dickensen. The plaintiffs are entitled to the removal of the caveat in this case. It should never have been lodged."
Plain English: The Court rejects the defendant’s argument and orders the caveat removed because it should not have been put on the title.
On the merits (para [49]):
Text: "The defendant's case in defence of the caveat depends upon its being shown that there is an arguable case that he has an interest in the property... I am satisfied that he does not."
Plain English: Even if the statutory prohibition did not apply, the defendant’s evidence did not reasonably show he had a real claim or right which would allow him to keep the caveat.
Costs order (para [88]):
Text: "In the circumstances, the first defendant will pay the plaintiffs' costs to be taxed on an indemnity basis."
Plain English: The defendant must pay the plaintiffs’ legal costs on a generous basis because the caveat was lodged without good reason.
What fact patterns trigger this precedent
This judgment is squarely directed at situations where:
A caveator has previously lodged a caveat over a particular estate or interest, and that caveat has been removed from the register either by order or because the caveator withdrew it ([5], [35]); and
The same caveator subsequently attempts to lodge another caveat in respect of the same interest and same land ([2], [5]).
Under these facts, the judge’s construction of s 91(4) operates to bar re-lodgement by the same person: the new caveat will be susceptible to removal under s 90(3) and further court orders (injunctions, costs) can follow ([40], [70], [88]).
Additionally, even where the statutory bar is not invoked, the decision reiterates the separate requirement that a caveator demonstrate an arguable caveatable interest to resist removal; absent that, removal will be ordered on the merits ([49], [61], [64]).
How later courts have treated it
The judgment itself discusses prior authorities but does not record any later judicial treatments of this decision (it is a first-instance Victorian Supreme Court decision dated 23 April 2003). Within the judgment the Court:
Cited Sinn v National Westminster Finance Ltd to observe the historical continuity of the statutory provision though noting Sinn did not address the precise point here ([24]).
Referred to an unreported 2000 VSC decision of Beach J where Beach J apparently accepted a different practical result regarding re-lodgement after withdrawal; Bongiorno J treated that as possibly a pragmatic, not settled, precedent ([29]).
Distinguished a Queensland Full Court decision in Re Leighton Properties which concerned a different statutory provision in Queensland law and thus did not aid the present construction ([32]).
Because the present task restricts the analysis to the judgment’s own text, statements about subsequent appellate treatment or citation history beyond what is recorded in the judgment cannot be asserted here. The judgment itself records that the issue has attracted little attention historically but does not catalogue later authorities applying or overruling its conclusion ([24], [29], [43]).
Still-open questions
The judgment resolves the question before it, but leaves several practical and doctrinal questions that may invite further judicial clarification:
Precise boundary between 'removed' and 'withdrawn' in different factual contexts:
Bongiorno J concluded that 'removal' includes withdrawal because the Registrar's cancellation is the operative act. There remains scope for argument about any circumstances in which voluntary withdrawal should be treated differently for the purpose of re-lodgement (for example, where a withdrawal was procured by fraud, misrepresentation, or under duress), the judgment does not explore such exceptions ([35]).
Interaction with other statutory schemes and other jurisdictions:
The Court distinguished Re Leighton Properties because Queensland’s statutory language differed ([32]). Different states may have distinct drafting; whether the reasoning here applies outside Victoria will depend on local statutory text and authorities.
Practical conveyancing consequences:
The Court observed that practice has long viewed re-lodgement as inappropriate ([43]). The decision provides judicial reinforcement but does not, and need not, provide practical guidance on how practitioners should record or treat rights following withdrawal and settlement of caveat disputes (for example, whether safeguards are needed when settlements contemplate future claims).
The role of prior court orders or compromises:
Where a previous withdrawal occurred as part of a compromise, as here, the judgment treats the withdrawal as a bar to re-lodgement. Questions may arise where compromise terms are unclear, or where the compromise expressly preserves rights to re-lodge, the judgment did not address such contractual nuances.
Remedies and costs:
The Court awarded indemnity costs for a caveat lodged without reasonable cause ([88]). The line between negligent or borderline caveating and 'without reasonable cause' may need further elaboration in future cases.
Practitioners dealing with caveats should be alert to the Court’s approach: withdrawal or removal of a caveat by a caveator will generally preclude that same person from re-lodging a caveat over the same interest, and absent a genuinely arguable caveatable interest the court will remove the caveat and may award indemnity costs ([35], [40], [49], [88]).
Land law - Torrens title - Caveat - Removal of caveat - Second caveat lodged in respect of same interest - Whether permissible - Whether withdrawal of caveat encompassed in the words of ss 91(4), 118, Transfer of Land Act1958
[3]
This is an application pursuant to s.90(3) of the Transfer of Land Act1958 for removal of a caveat forbidding dealings in respect of five parcels of land in a subdivision formerly known as 29 Murray Street, Anglesea. The caveat was lodged on 12 August 2002. The land comprises four lots registered in the names of the plaintiffs and one lot registered in the name of the body corporate of the subdivision. That lot was common property.
[4]
The caveat the subject of the proceeding is identical in form to a caveat previously lodged over the same land before it was subdivided. That caveat had been withdrawn following a proceeding brought by the same plaintiffs in this Court for its removal against the same defendant, which proceeding was compromised upon the defendant agreeing to withdraw the caveat and paying the plaintiffs' costs.
[5]
In this application a preliminary point arises as to whether the lodging of the second caveat contravened s.91(4) of the Transfer of Land Act1958. That sub-section is in these terms:
[6]
"(4) A caveat that has lapsed or been removed shall not be renewed by or on behalf of the same person in respect of the same interest."
[7]
The history of that sub-section is somewhat curious, but it can be traced back to the Transfer of Land Statute of 1866, which, in the style of Acts common in those days, contained a provision in the middle of a very long section, s.117, in these terms:
[8]
"A caveat shall not be renewed by or on behalf of the same person in respect of the same estate or interest, but if before the expiration of the said period of 14 days the caveator or his agent appears before a judge," etc.
[9]
The condition referred to was the putting up of security to entitle the caveator to maintain the caveat.
[10]
The same section was repeated as s.144 of the Transfer of Land Act1890 and repeated again as s.184 of the Acts of 1915 and 1928. In 1958, with the consolidation of that year, the section was re-drawn and the provision with which I am presently concerned was placed into s.90(4). It was in these terms:
[11]
"(4) A caveat shall not be renewed by or on behalf of the same person in respect of the same interest."
[12]
The Transfer of Land (Amendment) Act1979 revised somewhat the provisions relating to caveats. In particular, it deleted s.90(4) of the principal Act and replaced it with three other sub-sections, being (4), (5) and (6), and enacted s.91(4) in the terms in which it is still found. The Bill for that amending Act was the subject of an Explanatory Memorandum upon its second reading in the Victorian Parliament which, in relation to Clause 10 of the Bill, said the following:
[13]
"Sub-clause 1 deals with the operation of caveats. It proposes several amendments of sections 90 and 91 of the Principal Act. Some are intended merely to re-arrange the text in a more satisfactory fashion. The more important changes are as follows: ..."
[14]
The Memorandum then goes on to refer to three changes concerning caveats, none of which are relevant to the matter presently under discussion. Having regard to that Explanatory Memorandum it seems clear that the draftsman considered that the re-arrangement of s.90(4) to become s.91(4) in different language was merely "intended to re-arrange the text in a more satisfactory fashion". The question is whether it did so, or whether it had more far-reaching effects.
[15]
In an intriguing argument, Mr Dickensen, for the defendant, pointed to the words "lapsed or been removed" where they appear in s.91(4) and noted that they were used in various parts of the division of the Act dealing with caveats in what he submitted was a contradistinction to the word "withdrawn". Interestingly, in Sinn v. National Westminster Finance Ltd[1], Tadgell, J. at 365 referred to s.91(4) of the Act, as it presently is, in the following terms:
[16]
"A provision equivalent to s.91(4) of the Transfer of Land Act1958 has stood in the Torrens title legislation of this State since the Transfer of Land Statute 1866 (Act No. 301) but it appears to have attracted remarkably little attention from the courts. Until the Transfer of Land Act1954 it used to be part of a long, unbroken section and to read `the same estate or interest' instead of `the same interest'. Otherwise, its language has always been the same as it is now: see Transfer of Land Act1928 s.184, Transfer of Land Act1915 s.184, Transfer of Land Act1890 s.145, Transfer of Land Statute 1866, s.117. By Act No.9324 of 1979, the present s.91(4) was transferred from s.90 and placed where it now is, without alteration to its terms."
[17]
I say this is interesting because it is clear that the wording of s.90(4) was changed, and what Tadgell, J. must have meant in that case when he said it was placed into s.90 "without alteration to its terms" was that there had been no alteration to its meaning. It must also be noted, however, that His Honour was not concerned in that case with the same question that is before the Court in this case. He was concerned with the more usual question as to whether a second caveat had actually been lodged in respect of the same estate or interest, a problem which has come before the courts on many other occasions.
[18]
If Mr Dickensen is correct in his argument, the alteration made by the 1979 amending statute was considerably more far-reaching than simply a re-arrangement of the sections, as the draftsman who wrote the Explanatory Memorandum asserted. In support of his argument he points to a case in which Beach, J. in this Court appears to have accepted that a withdrawal of caveat had a different consequence to the lapsing or removal of a caveat: B & F Operations Pty Ltd v. Riviera Garden Suppliers Pty Ltd, an unreported decision of 30 March 2000[2]. Beach, J.'s apparent acceptance of the situation contended for by Mr Dickensen may be explained by reference to the way in which the order which he made came about. He referred to it being "the practical solution to the problem" which was presently before him. Although he did say that the plaintiff could re-lodge fresh caveats in respect of an interest after a caveat had been withdrawn, it is difficult to tell from His Honour's relatively short judgment whether that point had been the subject of argument. It seems that His Honour was referring to a way round a particular problem rather than a strict application of what might be said to be standard practice in relation to caveats.
[19]
Mr Dickensen also pointed to a Queensland case of Re Leighton Properties (Qld) Pty Ltd[3], where the Full Court of Queensland (Connolly, Thomas and Ambrose, JJ.) held that a withdrawal of a caveat did not have the effect of preventing the lodging of another caveat on substantially the same grounds. However, in that case their Honours were concerned with s.40 of the Real Property Act of Queensland, which specifically prohibited the lodging of another caveat on directly or substantially the same grounds where a caveat has been ordered to be removed by an order made by the Supreme Court, or where a caveat has lapsed. Accordingly, that case is not of any assistance in determining the present problem.
[20]
What causes a caveat to have effect is the registration of the caveat by the Registrar of Titles. When a caveat is lodged, or when it is withdrawn, or when it is ordered to be removed by the Court, an act of the Registrar follows which effects the entry in the register book. It is not, however, the act of the Registrar which effects the removal of a caveat where one lapses. Some assistance can be found in respect of this question from the decision of Gowans, J. in Delma Investments Pty Ltd v. Shillito[4], where his Honour was concerned with the question of the lodging and removal of a caveat, and said, at p.443:
[21]
"The inference, in my view, is strong that what brings the caveat into force is the entry of the memorandum under s89(2), and that what causes it to cease to be in force is its cancellation. That is the view taken by the Registrar of Titles, and, in my opinion, he is correct."
[22]
It seems to me that the word "removal" and its other parts of speech is an encompassing word which can mean removal by order of the Court, or removal by the act of the caveator in withdrawing the caveat. In both cases the cancellation of the protection afforded by the caveat is effected by an act of the Registrar who acts upon the prior act of the caveator. It is otherwise, of course, when one uses the word "lapse". Lapse occurs by operation of law upon the effluxion of time.
[23]
It follows that I do not accept the argument of Mr Dickensen. The plaintiffs are entitled to the removal of the caveat in this case. It should never have been lodged.
[24]
I might add by way of a postscript that the lodging of a second caveat in respect of the same interest by the same person has, so far as I am aware, always been regarded in conveyancing practice as inappropriate or impermissible.
[25]
Although the plaintiffs are entitled to an order that the Registrar remove the caveat in this case, having regard to the material placed before the Court and the arguments of counsel, I should briefly deal with the issues in the case, lest I be incorrect about the point of law which I have decided.
[26]
The defendant's case in defence of the caveat depends upon its being shown that there is an arguable case that he has an interest in the property. When I say "arguable case" I mean that there is a serious issue as to whether he has such an interest. I am satisfied that he does not.
[27]
The agreement which the defendant asserts in his affidavit (in conclusionary and inadmissible language) is not borne out by an examination of the documentary evidence.
[28]
The first document which goes to the issue of whether there is or is not an agreement between the parties is the exhibit to an affidavit sworn by a director of the first plaintiff, Mr Rodney Craig Bell. It is a fax message which he sent to the first defendant setting out what he says is a summary of what was discussed. That summary provides that he or interests associated with him and one Middleton or interests associated with him were to purchase the property on a ten percent deposit, borrow the remainder and meet the interest on the borrowed money, stamp duty, subdivision costs, town planning fees, etc. After taking a clear profit of $150,000 they would pay the balance to the first defendant "as a fee for promoting the development". If that is a true representation of the agreement, it would have given no interest in the land to Mr Casboult. It may not have been, for subsequent correspondence, to which I need not turn, is certainly equivocal as to whether that was the agreement, whether there was some other agreement or whether there was any agreement at all, but at no stage in any of that correspondence is there able to be divined any agreement which would give Mr Casboult a caveatable interest in this property.
[29]
A letter (dated by fax-line as being on 5 June 2001) is relied upon by Mr Casboult as an acknowledgment by the relevant director of the plaintiff (Mr Bell) that there was a partnership between him and the plaintiffs or those with whom they were associated. That partnership was alleged to include Mr Phil Gude, a politician or former politician. But subsequent correspondence, written not only by Mr Bell but also by Mr Casboult himself, casts doubt on whether that was a contractual document at all or contained any of the terms of a contract.
[30]
It is not necessary for me to go any further. There is no basis upon which Mr Casboult can maintain that he has any interest in this land. There is no serious issue to be tried. Even if there were, Mr Messer, for the plaintiffs, makes the valid point that any such agreement would always have contemplated a sale of the land so that the balance of convenience would lean heavily in favour of discharging the caveat in any event.
[31]
Accordingly, I reach the conclusion that, even if I am wrong as to the question of law which I have decided, the defendant has not raised a sufficiently serious issue to be tried as to whether he has a caveatable interest in this land or not, and accordingly, on the merits of the application, the plaintiffs are entitled to the relief which they seek.
[32]
I should have noted at the beginning of this judgment that the Registrar of Titles has formally appeared but has taken no interest in the proceedings. The orders made against her will operate in any event.
[33]
The orders the Court will make are as follows:
[34]
1. That the requirements of rr.5.03(1) and 8.02 of the Supreme Court (General Civil Procedure) Rules 1996 be dispensed with.
[35]
2. That the plaintiffs be authorised to commence this proceeding by originating motion in Form 5C.
[36]
3. That pursuant to s.90(3) of the Transfer of Land Act1958 the second defendant be ordered to remove caveat No. AB 916344E from the land more particularly described in Vol. 10705 Folios 180, 181, 182, 183 and 184.
[37]
Having regard to the first defendant having already lodged what I have found to be an illegal caveat in respect of this land, I will grant the injunction also sought that the first defendant be restrained from lodging for registration any further caveat claiming any interest in the land more particularly described in Vol. 10705 Folios 180, 181, 182, 183 and 184.
[38]
The plaintiffs seek an order that the first defendant pay their costs on a solicitor and own client basis, that is to say, on what is more commonly these days called an indemnity basis. In support of that submission they point to the fact that the defendant lodged a second caveat in respect of the same interest on the same land. Although Mr Dickensen defends his client's position by reference to his argument that it was not obvious that the lodging of such caveat was illegal, I am unable to accept that submission. The lodging of a second caveat, in the circumstances of this case, constituted the lodging of a caveat without reasonable cause.
[39]
Indeed, even if s.90(4) of the Transfer of Land Act1958 did not have the meaning which I have found, having regard to the allegations made by the first defendant himself in the litigation commenced by him in the County Court where no interest in the land was claimed, no reasonable cause for lodging the caveat was shown.
[40]
Further, s.118 of the Transfer of Land Act provides that the Court can award compensation in respect of a caveat which has been unreasonably lodged. In the circumstances it is not necessary to enlist s.118 of the Act in support of an order for indemnity costs. It is sufficient to exercise the ordinary discretion as to costs. Sec.118 certainly does not in any way detract from the exercise of that discretion in this case to give the plaintiff indemnity costs.
[41]
In the circumstances, the first defendant will pay the plaintiffs' costs to be taxed on an indemnity basis.
Order that the Registrar remove caveat No. AB 916344E from Vol. 10705 Folios 180, 181, 182, 183 and 184; injunction restraining the first defendant from lodging any further caveat claiming interest in those folios; first defendant to pay plaintiffs' costs on an indemnity basis (see [70], [88]).