Legal Hypothetical

KEVIN and Julie are successful investors in local property and decided to assist their friends Wayne and Gabby, who had recently married, enter the market.

The idea was that Wayne would borrow his share from Kevin and Julie and that Gabby would pay her own share; so all parties contributed equally.

The property was purchased as tenants in common with all four names on the title in equal shares.

Over the years the market had risen considerably, yet Kevin and Julie were yet to receive any payment form Wayne.

Julie and Kevin became even more concerned when Wayne and Gabby’s relationship deteriorated, as Wayne had always said ‘if things got rocky with Gabby, I’d buy a motorbike and ride off into the sunset’.

Unfortunately, Wayne and Gabby separated.

Julie and Kevin wanted to stop Wayne from selling his share of the property, as they believed he would indeed ride off…

Julie and Kevin discussed options with their solicitor, who informed them that they held an “equitable interest in land pursuant to a constructive or a resulting trust arising upon their contribution”, thus giving them an option to lodge a caveat, which in operation acts as an injunction to prevent Wayne from selling his share of the property.

When Wayne was informed a caveat was issued over his share of the property, he was furious; he had already purchased a motorbike with a matching trailer, thinking he just needed the cash for a fresh start.

Wayne instructed his solicitor to issue a ‘lapsing notice’ to remove the caveat, allowing Wayne to sell.

After receiving the ‘lapsing notice’ Kevin and Julie had 21 days to prove that the caveat should remain.

Kevin and Julie were successful in lodging an order in the Supreme Court extending the operation of the caveat.

The court held that they had sufficient proprietary interest and further it was necessary to extend the caveat to resolve the dispute with Wayne.

Unfortunately for Wayne this meant he could not pack his trailer full of loot.

Thank you to Anthony Fogarty for his assistance with this column.

If YOU would like a particular issue addressed, please email me at or call me on (02) 66 487 487.

By Manny WOOD, Solicitor

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