Can a Caveat be Lodged Because of Employment Money Owed?

[Rod]

Hi guys,

Does anyone know if I can lodge a caveat over property in a person's name where that person is also a sole director and owner of a business that owes me money as an ex-employee? The amount of money owed is greater than $30k. The state is Victoria.

 

[rebeccag]

G’day Rod,
Its a misconception that anyone can caveat a debtor’s property to secure the repayment of a debt. In order to caveat their property you must have a direct interest in that property. If you lodge a caveat without reasonable cause, then you may be liable for any loss caused by the caveat.
(See the Victorian Government Department of Transport, Planning and Local Infrastructure “Caveats, covenants and easements” page.)

I presume you've called and written to your former employer requesting payment? Have you had someone independently confirm the amount owing to you?

Check out the Art's Law "Debt Recovery" page that takes you through the steps for recovering money owed to you in Victoria (via either VCAT or The Magistrate's Court Victoria) and provides some great information.

Legal Aid Victoria also has a "Debt and financial issues" page that you might find useful.

Hope that helps. Let us know how you go.

 

[Rod]

Can't say too much here. The matter has been to the Fair Work Ombudsman and it is clear that there are underpayments and the Ombudsman said they don't have the resources to go to court and it has to be done by me.

The question I asked assumes the debt is real. I have no doubt it will be proved when it goes to court. I want to make sure he doesn't dispose of the one asset he has before the matter is heard in court.

 

[Tim W]

Its a misconception that anyone can caveat a debtor’s property to secure the repayment of a debt.

I agree with this statement.
In fact, it's not just a misconception, it's one of the great myths.

Put simply - an applicant for a caveat needs a "caveatable interest" in the land - and you don't have one.

By comparison, entities such as banks and credit providers,
and other entities who loan money commercially,
usually have a security over the land (either a mortgage or a commercial "charge").

They have a caveatable interest.
What you have is an unsecured debt, and no interest in the land at all.

 

[John R]

Hi Rod,
I also agree with @rebeccag and @Tim Williams.
If all other debt recovery actions have failed to date, have you considered starting a civil debt recovery proceeding in the Magistrates Court of Victoria? Given the nature of the debt, amount and assuming that you have all the paperwork, etc., you may be able to find a lawyer to work on a fixed fee to file the complaint and attend any hearings on your behalf.

 

[James D. Ford - Solicitor]

Hi Rod

Before you proceed any further, your dealings appear to be with a business that is a Pty Ltd company -- in that you were an employee of the company.

Does the company own the land?

If not, which is what you have indicated, your answer is no and you can stop there with regard to any thoughts of a Caveat. That is, unless the sole director has signed some kind of personal guarantee, or some other agreement exists between yourself and the sole director personally that would hold them responsible for the debt to you. We could then discuss whether this would be enough to constitute a caveatable interest in the property.

Are you owed any Super ? If so, you need to contact the ATO to chase this for you.

If you are owed wages, what steps have you taken against the company so far ?

Kind regards, James

 

[James D. Ford - Solicitor]

There is a 5-minute time limit on edits... so I will paste the edits/extra info here...

Superannuation
Are you owed any Super? If so, you need to contact the ATO (Unpaid super | Australian Taxation Office) to chase this for you.
If you are owed wages, what steps have you taken against the company so far?

Unfair Dismissal?
Was it a case of unfair dismissal.. if so you must act urgently to take action with Fair Work within the 21 days of your last work day. If you earn above the statutory minimum base salary of $129,300 for the 2013-2014 year, then Fair Work cannot assist.

Fair Work
Fair Work can assist you to recover unpaid wages and leave entitlements, but only to the NES - National Employments Standard level, or to the minimum covered by your award or enterprise agreement.

If you want to claim unpaid wages above these "safety net" levels...

VCAT
As an alternative to the Magistrates Court, you may want to consider making a minor civil debt claim in VCAT, which is likely faster and cheaper and can be done without lawyers - assuming you had a written or verbal employment contract.

Litigation
I recommend you seek legal advice before you proceed with any litigation in VCAT, or the Magistrates Court.

Kind regards, James

 

[Rod]

Thanks for the replies.

Things are in motion with the Fair Work Commission and the ATO, FWC hearing is next month. Need to decide whether to sue for unpaid wages in the Vic magistrates court (Industrial division) or the Federal Magistrates Court. The Fair Work act allows either court to be approached. Claim is too large for small claims Not sure of advantages/disadvantages of either court option.

re: Caveat. The tie in I saw is that as sole directed he is personally responsible for wages debts. Other cases I have read have made both the company and the director jointly and severally liable for these kinds of debts. The debt is not considered to be a standard civil debt.

re: Caveats. Found this in the Victorian TRANSFER OF LAND ACT 1958 - SECT 89

(1) Any person claiming any estate or interest in land under any unregistered instrument or dealing or by devolution in law or otherwise or his agent may lodge with the Registrar a caveat in an appropriate approved form forbidding the registration of any person as transferee or proprietor of and of any instrument affecting such estate or interest either absolutely or conditionally and may, at any time, by lodging with the Registrar an instrument in an appropriate approved form, withdraw the caveat as to the whole or any part of the land.
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The key wording above is ' or dealing or by devolution in law or otherwise' Seems to indicate that it may be possible. What does 'or otherwise' and 'or dealing' in this section mean? From a layperson's perspective (ie me) it seems that any interest can be used. It seems the part saying 'or devolution in law' really only applies to inheritances or maybe contracts passing on control of property.

Suppose my other options are Injunction, Freezing order and Security for costs, all harder and cost more though I know very little about them.

 

[Tim W]

Thirty grand is a lot of unpaid wages.
Is it salary/wages, or is it super and entitlements
(such as recreation leave)?

Is the business still operating?
Or is it (say) in administration/ receivership/ liquidation?

 

[Owens Lawyers]

Rod, in terms of advantages of claiming in either the FCC (formerly FMC) or VCAT I can only give you the view of a NSW lawyer but I believe the FCC would be better equipped to handle a claim like this and would have more experience with them.

Although a NSW state government website, www.lawassist.lawaccess.nsw.gov.au has a section on recovering wages and entitlements in the FCC.