Using a Caveat to Protect Land Affected by a Surveying Error

USING A CAVEAT TO PROTECT LAND AFFECTED BY A SURVEY ERROR

A caveat can be an essential tool to protect interests in land. The Torrens System adopts the principle that a registered interest generally prevails over any unregistered interest, and that the first registered interest prevails. The caveat is a relatively simple, quick and inexpensive way to achieve priority on the Register. However, an ‘interest’ in land is essential. The question of what kinds of interests can be protected by a caveat is vexed. There is no exhaustive list. Kellehers Australia recently acted for a registered proprietor whose land became apparently included on a neighbour’s title due to a surveying error. Thus, although our client was still the registered proprietor, the surveying error created an apparent title overlap. The question was whether our client, even though he was the registered proprietor, could lodge a caveat over his own land to protect against this surveying error. A survey error does not appear to create a distinct interest or estate in land. Some courts found that:

a registered proprietor cannot lodge a caveat against dealings merely because he is the registered proprietor. He must go further and establish some set of circumstances over and above his status as registered proprietor which affirmatively gives rise to a distinct interest in the land.[1]

By contrast, other courts found that where the caveator affected by a survey error had no notice of the lodging of the erroneous survey, he could lodge a caveat to prevent ‘irremediable mischief’[2]. ‘Misdescription of boundaries’ (ie surveying errors) is an exception to indefeasibility, so it cannot validly extinguish the prior interest[3]. Therefore, a Court found it could be claimed as the basis of a caveat[4]. In this situation, the caveat is temporary, and the caveator must promptly make an application to permanently correct the Register error. The new online lodgement system for caveats does not have a category of estates or interests that fits the survey error situation. The registered proprietor who caveats his own land claims a ‘Registered Proprietor(s) being entitled to prevent improper dealings’. However, the online electronic lodgement system could, in our view, be improved to more readily facilitate lodgement of more unusual dealings in land. Freeman Zhong 15 September 2017 [1] Re an application by Haupiri Courts Limited (No 2) [1969] NZLR 353, 357 (Richmond J). [2] Ex parte Solling; Chisholm (Caveator) (1893) 14 LR (NSW) 399 [3] Transfer of Land Act 1958 (Vic) s 42(1)(b). [4] See Milne Feeds Pty Ltd v Bride (1993) 10 WAR 542 (Malcolm CJ), dealing with the fraud exception to indefeasibility. Copyright © Kellehers Australia 2017 Liability limited by a scheme approved under Professional Standards Legislation This fact sheet is intended only to provide a summary and general overview on matters of interest. It does not constitute legal advice. You should always seek legal and other professional advice which takes account of your individual circumstances.