White v White & Registrar of Titles [2014] VSC 449

The background of this matter involves a husband and wife that entered into a Binding Financial Agreement when they separated.

The couple owned two properties as joint tenants. One of the terms of the Agreement was that the husband would transfer his interest in property A to the wife. Similarly, the wife would transfer her interest in property B to the husband. The husband would also be required to pay the wife $1.1M within five years.

The husband only paid $243k. In the mean time, he had granted three mortgages over his land. The wife sued him for the unpaid balance and lodged a caveat over his land claiming an ‘estate in fee simple’ pursuant to the agreement.

The husband sought to have the caveat removed pursuant to s 90(3) of Transfer of Land Act 1958. As a result of his application, the wife was required to ‘establish that there is a serious question to be tried that they have the estate or interest which they claim in the land in question’ to establish that the balance of convenience favours the maintenance of the caveat.

The key difficult for the wife was that her interest was incorrectly described in the caveat as she had an equitable lien securing payment under the Agreement, rather than an estate in fee simple. Her solicitors sought leave to amend the caveat.

The Court refused to grant leave to amend the caveat because

  1. Amendment sought is to the interest claimed and not just the grounds of claim or the scope of the protection;

  2. No leeway should be given due to legal ignorance or unavailability of legal advice particularly as the wife had solicitors at the time and chose to lodge the caveat herself;

  3. The belief that caveats can be lodged that are imprecisely formulated and then ‘fixed up later’ is not to be encouraged by the Court.

Accordingly, the wife was required to remove her caveat. The Court further noted that her interests can be protected by notifying the mortgagees of her interest and she can seek orders from the Court preventing the husband from further encumbering the properties.

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