(1) Any person claiming such an interest in unregistered land as entitles him to object to a disposition thereof being made without his consent, or claiming to be an incumbrancer on unregistered land, may, if claiming otherwise than under an instrument registered in the Registry of Deeds, on producing an affidavit in the prescribed form of his interest, lodge a caution with the Authority to the effect that the cautioner is entitled to notice of any application that may be made for registration of an owner of the land.

(2) Thereupon, an owner of the land shall not be registered until notice has been served on the cautioner to appear and oppose, if he thinks fit, the registration, and the prescribed time has elapsed since the date of the service of the notice, or the cautioner has entered an appearance, whichever first happens.

(3) If any person lodges a caution under this section without reasonable cause, he shall be liable to make compensation, recoverable as a simple contract debt, to any person damaged thereby.