A person can therefore use the caveat to protect their interest and, for instance, prevent the owner of the property from selling it. However, the caveator must have a genuine interest (a caveatable interest) in the property at the time the caveat is lodged.
Caveatable interests can include a mortgage, a transfer, a purchaser’s right under a contract of sale and a tenant’s right under a lease. But if a caveatable interest is claimed it can be challenged and the caveator may be sued for any loss caused to the owner of the property.
In the recent Supreme Court of NSW case of Dodd v Dodd [2020] NSWSC 1094 it was held that an application for a family provision order with respect to a property (an order for a share of a deceased person’s estate) does not give rise to a caveatable interest.
In another Supreme Court case of Guirgis v JEA Developments Pty Limited [2019] NSWSC 164 a wife involved in family law proceedings against her husband arranged for a caveat to be lodged on behalf of her company on the title of a property that the husband was selling claiming money owed by the husband under a loan agreement. The Court ordered the caveat to be removed because the alleged loan agreement was not in writing and by itself created no caveatable interest in the property.
In both of the above cases the caveator failed because it did not have an existing interest in the property. In the first case, the caveator was asking the Court to create an interest in the property. With regard to the second case, just because the owner of a property owes you money this does not equate to an interest in the property.