A caveat stops the Registrar registering dealings. If one is blocking a genuine transaction, the Land Registration Act provides four ways out, in roughly ascending order of cost.
1. Ask the caveator to withdraw — section 93
(1) A person who has lodged a caveat, or his lawyer or agent, may withdraw it at any time before commencement of proceedings in the Court in relation to that caveat.
(2) Withdrawal is effected by giving notice to the Registrar in the approved form.
Note the cut-off: withdrawal is available before proceedings commence. Once the caveator has gone to court to establish the interest, this route closes.
Withdrawal is often achievable where the underlying dispute has been settled, the debt paid, or the caveator has been satisfied some other way. Ask first — it is free.
2. Ask for consent to the particular dealing — section 86(2)
Where an instrument otherwise blocked by a caveat is endorsed with the consent of the caveator, that instrument may be registered.
This is the most commercially sensible solution and the most under-used. The caveat stays in place protecting the caveator against everything else; the one dealing you actually need proceeds.
A caveator whose real concern is being paid out of the proceeds will often consent to a sale on terms that the money is dealt with in a particular way. A caveator protecting a right of way will often consent to a mortgage that does not affect it. Identify what the caveator actually wants before assuming a fight is necessary.
3. Apply to the Registrar to cancel — section 89
Where it is proved to the Registrar’s satisfaction:
(a) that the estate, interest or claim of the caveator has ceased or been abandoned or withdrawn; or
(b) that the caveator’s rights are satisfied or arranged; or
(c) subject to subsection (2), that the nature of the caveator’s estate, interest or claim does not entitle him to forbid the sale, mortgage or other dealing,
the Registrar may cancel the caveat.
Paragraph (c) is the important one: it is the answer to a caveat lodged by someone who has no caveatable interest at all — an unsecured creditor, an unpaid contractor without a charge, a person merely negotiating to buy. See who can lodge a caveat.
Section 89(2): at least seven days before cancelling on the ground in subsection (1)(c), the Registrar shall cause notice to be served on the person who lodged the caveat, in accordance with section 94.
Under section 94, notices may be served at the address specified in the caveat, or at the office of the lawyer or agent who signed it.
What to put before the Registrar: the title search showing the caveat, the caveat itself, and evidence going to one of the three grounds — a deed of settlement, a receipt, a release, or an analysis showing the claimed interest is not an interest in land.
4. Summon the caveator to court — section 88
(2) Where a caveat has been lodged, the affected proprietor may summon the caveator to attend before the Court to show cause why the caveat should not be removed.
(3) On proof that the caveator has been summoned, the Court may make such order in the matter and as to costs, either ex parte or otherwise, as it deems just.
(4) Without limiting that power, the Court may order that the caveat (a) continue in force; or (b) be removed.
(5) The Registrar may make such entries and endorsements as are necessary to give effect to the order.
Two features worth noting. The burden is on the caveator to show cause why the caveat should not be removed — it is not for the proprietor to prove a negative. And the Court may proceed ex parte on proof that the caveator was summoned, so a caveator who ignores the summons risks removal in their absence.
Section 88(1) — who is an “affected proprietor”
- For a section 82(a) caveat — the proprietor against whose title to deal the caveat was lodged, and includes a person claiming under a transfer or other instrument signed by the proprietor.
- For a section 82(b) caveat — the person who made the application under section 153 to amend the certificate of title.
The extension in paragraph (a) matters: a purchaser holding a signed transfer, not yet registered, can bring the summons in their own name rather than depending on the vendor to do it.
Or simply wait — the three-month lapse
A caveat lapses after three months unless it was lodged with the written consent of the registered proprietor or an equitable mortgagee, or the caveator has, within the period, commenced proceedings and given the Registrar written notice of them. See what happens when a caveat lapses.
Where the transaction can wait, doing nothing is sometimes the cheapest route — and under section 92, once a caveat has lapsed the caveator cannot lodge another on substantially the same grounds.
And consider damages
Where the caveat was lodged without reasonable cause, section 90 allows a person aggrieved by the lodgement to bring an action to recover damages against the person who lodged it — for the sale that fell through, the finance that could not be drawn, and the costs thrown away.
Which route to use
- Ask for withdrawal (s 93) — free, and available until proceedings start.
- Ask for consent to the dealing (s 86(2)) — usually the fastest commercial fix.
- Apply to the Registrar (s 89) — especially where the caveator has no caveatable interest, or the claim has been satisfied.
- Summon to court (s 88) — where the caveator resists and the transaction cannot wait.
- Wait for lapse (s 91) — where three months is tolerable.
Sources
- Land Registration Act (Chapter 191) — ss 82–94, 153; Part VIII
- Raina No.1 Ltd v Elisha [2015] PGNC 158; N6051
- Land Act 1996 — ss 127–129
Before relying on anything here, read the current text of the Land Act 1996 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.