Friday, 29 July 2011

Amending the "interest" claimed in a caveat

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Mistakes are often made in describing the interest claimed in a caveat. Is it possible to amend the caveat to claim the correct interest?

Macaulay J considered this issue in Percy & Michele Pty Ltd v Gangemi [2010] VSC 530. where the interest claimed was "estate in fee simple" when it should have been "an equitable interest as a chargee".

The power to amend a caveat is derived from the discretionary power in s.90 of the Transfer of Land Act 1958 for the court to "make such order as the court thinks fit".

After considering Midwarren Estates Pty Ltd v Retek and Stivic [1975] VR 575 where Menhenitt J was of the view that s.90(3) did not authorise an amendment of the estate claimed, His Honour said at [101]:
"Having referred to these authorities, and canvassed these views, I do nonetheless recognise that the power expressed in s 90(3) is wide and unqualified. Ultimately, the better view may be that although the power is to be construed as being wide enough to amend the estate or interest claimed, in appropriate circumstances, nevertheless when exercising its discretion the court should generally be less inclined to amend the interest or estate claimed than to amend the grounds of the claim or the scope of the protection asserted."

In refusing the application to amend the interest claimed His Honour at [104]-[105]  identified four factors relevant to the exercise of the discretion:

(a)    the amendment sought is to the interest claimed and not just the grounds of claim or the scope of the protection;

(b)    the circumstances in which the error was made;

(c)   the court should not readily act in a way which might encourage the belief that caveats can be imprecisely formulated and then “fixed up later”; caveats act as an interlocutory injunction (albeit by an administrative act) and can have powerful and serious consequences; wrongly formulated caveats should not easily be tolerated;

(d)    the overall merits of the claim for a caveatable interest of the kind which is sought by the amendment; in other words, it should have regard to all of the same considerations which arise on the application of removal for a caveat in the terms sought.

His Honour refused the application.

See also Martorella v Innovision Developments Pty Ltd [2011] VSC 282.

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