Legal unregistered interests are paramount interests

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Legal unregistered interests are paramount interests under s42. Caveat System The caveat system exists to protect unregistered interests in TSL. S 89(1) – ability to lodge a caveat. The caveat forbids the registration of interests affecting the estate or interests. You may withdraw the caveat at any time. You may caveat against specific interests or general ones. Caveat is noted on the folio, if the registrar is satisfied it has complied. The RP is notified that there is a caveat on the folio. The caveat remains until: An inconsistent dealing is lodged or an application is made to remove the caveat. The caveator is notified by the registrar and time starts. The caveator has 30 days to commence. If the caveator does nothing it will lapse after 30 days. S89A – application to remove a caveat. Registrar gives notice to the caveator who must within 35 days abandon the caveat or commence court proceedings. S90(3) – application to COURT to have a caveat removed. A caveat prevents registration inconsistent with the interest that has been caveated. An inconsistent dealing is any dealing that has been caveated. Caveats do not prevent registered transfer by a mortgagee. Registration of dealings lodged before the caveat is lodged will be registered. Once a caveat has been removed, it cannot be renewed by the same person in accordance with the same interest. To be caveatable the interest must be a proprietory interest in land. The bulk of cases say that you do not need to have a registrable interest in order to be caveatable. A caveat must set out the nature of the state – see form. The interest of a beneficiary under a trust can be caveated. The interest under an option to purchase land is caveatable. (Question as to whether it must be exercised first). An agreement for an easement/ mortgage or lease is not caveatable. Charges are caveatable (security under K). Interest of purchaser under a K for sale of land is caveatable. 40
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What cannot be caveated? Right to land that are merely personal or contractual in nature (e.g. licence to occupy land). Can RP lodge a caveat against their own title? o Most Cases state that to caveat the RP will have to show more than a legal title. Will need to show a separate and distinct interest. o E.g. RP wants to set aside a fraudulently exercised power of sale. Swanston Mortgage – held that you need a separate and distinct interest in the land other than legal title. Mere equities are not caveatable. In Swanston it was held that it was a mere equity and therefore not caveatable. Swanston relied upon Latec Investments v Hotel Terrigal. o Commentary: Swanston misinterprets Latec. Latec considers the right proprietory in nature. It has been said that it is not supported. If it is proprietory it follows that it is caveatable.
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