Caveats and Family Law
Many separating couples find themselves in situations where one of the parties is the sole legal owner registered on the title of their matrimonial home. This can cause a great deal of anxiety and concern to the non-registered party, since the registered party could sell the property without their knowledge and disburse the proceeds without a single cent being produced to the non-registered party.
Therefore, many non-registered parties seek to lodge caveats against the property, as it operates as a statutory injunction preventing the registration on title of dealings contrary to the asserted interest by the caveator. This will, essentially, prevent the registered party from selling off the property without your knowledge or consent so long as the caveat remains on the property. Caveats are an affordable and effective way to protect your interests.
However, it is important to be aware that caveats are not a magical panacea that can be deployed wholesale in every family law matter. Caveats are not ‘bargaining chips’ in negotiations for property settlement. There is a complex set of rules governing when and how caveats can be lodged. Importantly, the existence of a family law claim alone does not create a caveatable interest. The lodgement of improper caveats can be expensive and detrimental to the lodging party – it might result in a costs order if unsuccessful.
When can you lodge a caveat?
There are a variety of grounds that form a caveatable interest, however in the context of a spouse who is not a registered proprietor, equitable trusts are the typical ground creating the caveatable interest. This may consist of an implied, resulting or constructive trust. Your family lawyer will be able to advise you which equitable trust applies to your situation.
In Doughterty & Dougherty, the court determined that the Family Law Act does not in itself do not give rise to an equitable or other interest capable of substantiating a caveat. It requires some proof that the legal owner holds the property on trust for the lodging spouse. The court has found that the following scenarios can justify the lodgment of a caveat:
1. Where the non-registered spouse contributed to the purchase price of a property but was not registered on title;
2. Where there was a transfer of the property into the name of another for nil consideration;
3. Where the non-registered spouse has made regular or substantial contributions to the mortgage repayments on the property, or has provided maintenance or improvements (e.g. renovations) on the property.
Alternatives to caveats
If you do not have a caveatable interest in a property, you can pursue alternative means to safeguard your interest in the property pool. If you have concerns that your spouse may sell the property without your knowledge or consent, you can apply for an interim injunction under section 114 of the Family Law Act, which will prevent them from dealing with the asset without further order.
This area of law is complex. We highly recommend that you speak with our team of family lawyers to understand whether you are able to lodge a caveat, and if not, how you can go about protecting yourself and your property interests.
