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Removal of Caveats under Section 138b Transfer Of Land Act

Thursday, March 16, 2017

Caveats can be removed in a number of ways, one of which is the procedure established by section 138B of the Transfer of Land Act 1893 (WA) (“TLA”).  

Operation

Under section 138B the registered proprietor(s) of the land in respect of which a caveat is lodged can apply to Landgate for the removal of the caveat. However, this procedure is not only available to registered proprietors; the process can also be utilised by judgment creditors seeking to increase their chances of successfully enforcing judgments against judgment debtors.

Using section 138B to ensure effectiveness of enforcement procedure

When a judgment is pronounced against a party in court proceedings, the parties cease being the plaintiff and defendant and become judgment creditor and judgment debtor. The sum that is ordered to be paid by the judgment debtor to the judgment creditor becomes the judgment debt.

Where the judgment debtor fails or refuses to pay the judgment debt, the judgment creditor is able to take steps to ensure that it receives the judgment debt. These mechanisms vary and are collectively known as enforcement procedures.

One common enforcement procedure is for the judgment creditor to obtain a property (seizure and sale) order (“PSSO”) in respect of the judgment debtor’s property; real, personal or both. This enforcement procedure is common where the judgment debtor has interests in real property. Once registered against the Certificate of Title of a property, a sheriff or bailiff is able to execute the PSSO by seizing and then selling the property with the proceeds of the sale, after all encumbrances are  going towards satisfying the judgment debt.

However, a PSSO is less effective where the property against which it is registered is heavily encumbered. The existence of caveats on the Certificate of Title can make it difficult for the bailiff to effect the sale of the property.

Under the section 138B procedure, a judgment creditor named in the PSSO can also apply to Landgate for the removal of a caveat which encumbers the subject property.

The procedure

The application itself is straight forward, requiring the applicant to simply fill out a form and no evidence in support is necessary. Once lodged with Landgate, the application is examined. After being approved the caveator is served with a notice requiring them to, within 21 days, either withdraw the caveat or obtain an order from the Supreme Court extending the operation of the caveat.

If the caveator fails to obtain an order from the Supreme Court extending the operation of the caveat within the 21 day period, the caveat will lapse and the caveat will be removed from the Certificate of Title.

The bailiff is then able to execute the PSSO by selling the property to satisfy the judgment debt owed to the judgment creditor. Of course, if after being served with the notice the caveator withdraws the caveat, the bailiff is able to execute the PSSO immediately and does not have to wait until the 21 day period expires.

Once the caveat has been removed under section 138B by either lapsing or being withdrawn, the caveator will not be able to re-lodge a caveat unless they obtain leave of the court or, if the section 138B application was made by the registered proprietor, the consent of the registered proprietor.

Limitations

The section 138B procedure cannot be used in respect of caveats that are:

  • lodged under sections 30, 176 or 223A of the TLA;
  • under any other written law which specifically provides for the lodgement of a caveat;
  • lodged by virtue of a Court Order;
  • protecting beneficiaries under a will or settlement;
  • lodged by or on behalf, or with the consent of the Minister for Lands;
  • lodged under any Commonwealth Act; or
  • lodged by the Registrar of Titles.

Therefore the procedure generally is available in respect of caveats which are protecting legal or equitable interests of a mortgage, charge or lien holder.

Further, once Landgate has sent the 21-day notice to the caveator, the applicant cannot withdraw the application.

We have extensive experience in enforcement procedure and are able to advise you as to whether a particular caveat is susceptible to an application under section 138B.

Liability limited by a scheme approved under Professional Standards Legislation.

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