Lodging a caveat is not a trivial act to be undertaken lightly. It has immediate legal effect and can have significant commercial and financial consequences. Legal practitioners and licensed conveyancers who advise on, prepare and certify caveats that are lodged electronically have an important role to ensure that obviously unmeritorious caveats are not lodged. This judgment arises from a failure by a licensed conveyancer to perform that role properly.
These proceedings were begun by the plaintiff (“Mr Guirgis”) for orders under s 74MA and s 74P of the Real Property Act 1900 (NSW) (the “Act”) for the removal of a caveat (the “Caveat”) and for compensation against the defendant. The sole director, secretary and shareholder of the defendant is Mr Guirgis’ wife (“Mrs Guirgis”). Mr and Mrs Guirgis are currently involved in a matrimonial dispute before the Family Court of Australia.
The Caveat had been prepared, certified and lodged electronically on behalf of the defendant over Mr Guirgis’ land (the “Property”) by a licenced conveyancer (the “Conveyancer”). When Mr Guirgis’ application came on for hearing, Mrs Guirgis appeared in person. It quickly became apparent that the defendant (Mrs Guirgis’ corporate alter-ego) did not have a caveatable interest in the Property and that at all times Mrs Guirgis had understood that to be the case. The defendant was ordered to remove the Caveat and pay Mr Guirgis’ costs of the application.
During the course of the hearing, evidence was given which caused me to form a prima facie view that the Conveyancer had acted either with a reckless disregard for her obligations in relation to the Caveat or had failed to meet the standard of care to be expected of a reasonably competent conveyancer in the preparation of the Caveat. I made directions which had the effect of the Conveyancer appearing before the Court to explain why I should not refer the papers to NSW Fair Trading so that its Secretary, who has regulatory responsibility for licensed conveyancers, could consider whether or not the Conveyancer’s conduct warranted disciplinary action.
The Conveyancer appeared before the Court. The Conveyancer apologised without reservation and acknowledged to the Court that there had been a complete departure from appropriate standards. The Conveyancer undertook to do further study in relation to the electronic filing of caveats as part of her annual professional development. On the basis of what the Conveyancer said to the Court, I was satisfied that it is highly unlikely that the Conveyancer would repeat such conduct in relation to a caveat and determined that it was unnecessary for the Court to take any further action in relation to the matter. Nevertheless, I consider it appropriate to publish these reasons to make clear how seriously the Court views the obligations of those who advise on, prepare and certify caveats.
Nick Karolidis Principal Lawyer & Accountant Karolidis & Co