An interim solution to the electronic lodgement of caveats

On 23 December 2022 the Supreme Court handed down an important decision dealing with the electronic lodgement of caveats online that the Office of the Registrar General has offered an interim solution to.

A caveat is a statutory injunction which restricts the registration of dealings and plans on a title to a property.

Registration requirements

Section 74F of the Real Property Act 1900 (NSW) (RP Act) provides that caveats lodged under that section must be lodged in the approved form and Clause 7 and Schedule 2 of the Real Property Regulations 2019 (NSW) require caveats lodged under section 74F of the RP Act to specify the particulars of the nature of the estate or interest in land claimed by the caveator. Section 74L provides that the Court may disregard any failure of a caveator to comply strictly with the requirements of Part 7A of the RP Act.

Caveats are required to be lodged through the electronic platform Property Exchange Australia (PEXA) and must only be registered by those who have an eligible interest in the land. As such, it is important to correctly identify the ‘estate or interest claimed’ in caveats.

Supreme Court decision

The PEXA lodgement platform provides specific options in relation to the description of the ‘estate or interest claimed’ in caveats and limitations to this process were highlighted in the Supreme Court decision in Brose v Slade [2022] NSWSC 1785 (Brose).

Kunc J handed down a decision in Brose which identified that the drop-down options available in PEXA are limited and restrict the possible descriptions of the estate or interest claimed by a caveator (at [77]). Kunc J accepted that, in terms, an estate in fee simple does not arise by a beneficial interest in a trust (at [79]) and noted that there is a public interest that a party with a legitimate caveatable interest should be able to record that interest clearly and legally correct in a caveat (at [80]).

Interim solution

The Office of the Registrar General has offered an interim solution by allowing the lodgment of caveats as a dealing with exception under Lodgment Rules exception 1.4.3. This is a general exception that applies to dealings whereby the transaction is unsuitable for electronic lodgment and the lodgment submission is supported by written evidence from NSW Land Registry Services (NSW LRS) confirming this.

As identified by Kunc J in Brose, there may be no appropriate description in the drop-down list for the 'estate or interest claimed' when electronically lodging a caveat. When this is the case, an interim solution provides for the following steps to be taken:

Prepare the caveat using the Caveat LRS Form 08X, which can be accessed from the NSW LRS website;
Request written confirmation from NSW LRS that the caveat is not suitable for electronic lodgment. Rely on the decision in Brose and indicate that there is no appropriate description in the drop-down list of the ‘estate or interest claimed’ in an electronic caveat in PEXA. The written request can be sent by email to eConveyancing@nswlrs.com.au ;
Prepare and attach a Lodgment Rules Exception Form identifying Lodgment Rules exception 1.4.3 with a copy of the email confirmation from NSW LRS in relation to Form 08X being lodged as a dealing with exception; and
Prepare and lodge the caveat via PEXA by creating a dealing with exception in ‘Documents’ and selecting 'Caveat (08X)' as the document type in PEXA’s render page.

It is important for practitioners to identify the correct ‘estate or interest claimed’ in caveats and are aware of the interim solicitation to the limitations observed by Kunc J in Brose.

For more personalised advice about caveats, please contact our people.

Ron Zucker 0410 590 111

Eollyn Cortes 0478 727 395

Sagang Chung 0431 435 333

Julia Zou 0426 670 202