1
– CONCEPTS AND CATEGORIES OF PROPERTY
Def:
Moore
v Regents of the University of California:
‘every species of estate, real & personal, & everything
which one person can own & transfer to another. It extends to
every species of right & interest capable of being enjoyed as
such upon which it is practicable to place a money value’
S36
Acts Interpretation Act: “any
legal or equitable interest (whether present or future, vested or
contingent, or tangible or intangible) in real or personal property
of any description (including money), & includes things in action
(e.g. shares)”
Private
Property dominant in W. Communal prop = Mabo.
Justifications
of PP: 1. Occupation Thy (1st
discovery/occupancy); 2. Labour Thy (labour &
skills); 3. Personality Thy (individuality & free
will); 4. Economic Thy (productivity & efficiency)
Characteristics
of Property: National Prov.
Bank v Ainsworth
1.
Definable; 2. Identifiable (by 3rd parties); 3.
Assignable (able to transfer to another: not an absolute
requirement: ACT v Cth); 4.
Durable
Categories
of Property: imp CL distinction btw Real Prop (land) &
Pers Prop
REAL
PROPERTY (rights in rem: P can recover res
= subject matter)
Corporeal
hereditaments: land & all affixed to land (soil, trees,
fixtures)
Incorporeal
hereditaments: intangible, non-physical rights affecting the
land (easements, profits a prendre)
Personal
Property:
(rights in personam)
1.
Chattels real: The peculiar categories of leases, used to be
considered as personal contracts, but are now interests in land.
2.
Chattels personal: “Goods” incl all chattels personal
other than things in action & money (SGA s3(1))
(a)
Choses in possession: Tangible or corporeal; Capable of physical
acquisition; Movable, all you can see & touch (except land).
(b)
Choses in action: Residual category (of the above): Colonial
Bank v Whinney. Right enforceable by action Loxton
v Moir. 1. Enforceability; 2. Incorporable &
intangible; 3. Bare right-must confer only a right w/out any
occupation or enjoyment. E.g. debt, shares, patents
2
– FIXTURES – the dividing line between real &
personal property
“whatever
is attached to the soil becomes part of it”
TESTS:
(contract, degree, purpose): Holland
v Hodgson
1.
Is there an express contractual provision?
If
so – apply contract, no need to examine other tests.
Standard
REIQ contract -TV antenna.
2.
Look at the degree of annexation
-
If the chattel is attached other than by its own weight, then it is
prima facie a fixture even if the degree of annexation is slight.
Onus is on the ‘chattel advocate’ to rebut this
presumption: Holland v Hodgson
-If
the chattel is only attached by its own weight, then it is prima
facie not a fixture, even if it has become embedded. Onus is on the
‘fixture advocate’ to rebut this presumption: Holland
v Hodgson
CASES:
Fixtures: Hawkins v
Farley:
Dishwasher; Reid
v Smith:
Qld’r house on stumps; Bank
of Melb v CBFC: A/C; Newton
v Brown (No 2): Window
blinds; Chattels: Leigh
v Taylor: tapestries easy to
remove; Palumberi
v Palumberi: Venetian
blinds = chattel; A-G C’th v
RT:
printing press strong annex, but its
only use was to hold & steady; ANZ
v HHH: Removable home.
3.
Look at the purpose of annexation (to rebut presumption):
-
If the chattel is intended for the better use or enjoyment of the
chattel itself, then it remains a chattel (even if it is not attached
by its own weight)
- If the chattel is intended for the better use
or enjoyment of the land, then it is a fixture (even if it is merely
attached by its own weight)
Yallingup
Beach Caravan Park v Valuer: decline
in importance of degree, look individual circumstances of each case -
looks at the intent of both parties
Objective
tests - Belgrave Nominees v
Barlin-Scott
-Degree
of annex & nature of chattel: easily removable w/out subst
damage?
-Duration
of annexation: temporary or permanent?
-Necessity
(trade/design) or complementary/aesthetic/design purposes?
-Parties’
status: owner more likely to be fixture, tenant more likely to be
chattel
CASES:
Fixtures: Trade/Business: Hobson
v Gorringe: Gas
engine affixed for trade purposes; Holland
v Hodgson: Looms attached to floor
of mill; AJSB v CFMIGC:
engineering machinery.
Architectural/Aesthetics: Re Whaley:
Tapestries were integral to design;
Norton v Dashwood:
Tapestries were a feature &
difficult to remove; D’Encourt
v Gregory: 1866-statues &
ornaments were integral to the design of the property-held as
fixtures
4.
Exceptions to general rule/tests:
(a)
Tenants’ fixtures: Subject to contract Curtin
v Meadow Holdings.
Residential
Tenancies Act 1994 (Qld): tenant must ask landlord’s
permission to attach fixture. Agreement must be in writing s117-8(1).
LL must not act unreasonably in failing to agree s118
(3). The terms about a fixture can include how & when
tenant can remove the fixture s118 (2).
In
general, tenant can remove if:
-
Attached for trade, domestic, ornamental purposes Holland
v Hodgson
-
Attached at T’s own cost Vesco
Nominees v Stefan Hair Fashions
-The
item is removable without causing substantial damage or the tenant
has repaired any damage caused: Mancetter
Developments v Garmanson
-The
tenant has exercised the right of removal during the tenancy or
within a reasonable time after the tenancy: McMahon’s
(Transport) Pty Ltd v Ebbage
(b)
Agricultural fixtures: the item is used for agricultural
purposes then it may be removed–the property must be over 5
acres, then the tenant can take sheds buildings & other fixtures
with them-PLA s153-155
(c)
Hire Purchase Agreements: Subject to the Hire
Purchase Act 1959 (Qld):
S32(1):
Goods weren’t fixtures when the hire purchase agreement was
made shall not be treated as fixtures while the agreement remains in
force
S32(2):
However, the owner of the goods isn’t entitled to repossess the
goods if any person other than the hirer ‘has bona fide
acquired for valuable consideration an interest in the land without
notice’ of the owner’s rights
PERSONAL
PROPERTY
3
– POSSESSION AND TITLE
‘the
general principle is that a person in possession of land or goods,
even as a wrongdoer, is entitled to take action against anyone
interfering with the possession unless the interferer is able to
demonstrate a superior right’
OWNERSHIP:
The concept of mine: Absolute/entire dominion or control;
the highest form of property; No one has a better right to claim.
“The
general right of ownership embraces subsidiary rights, such as
exclusive enjoyment, to destroy, to alienate or to alter & of
course, the right to maintain, & to resume & recover
possession from other persons.” Knapp
v Knapp
PROOF
OF OWNERSHIP: Possession is prima facie evidence of
ownership; presumption rebuttable by contrary evidence: Gatward
v Alley; Field v Sullivan
Personal
property may become owned by:
1.
Original Acquisition: creation of new property ie copyright,
acquisition of ownerless things eg wild animals, finding something
abandoned
2.
Derivative Acquisition or Transfer: (note nemo dat quod habet
rule s24(1) SGA); gift; assignment; operation of law (bankruptcy,
death; accession, commingling, destruction)
POSSESSION:
“a relationship between a
person & some material object”, “a relation
subsisting in fact”: Button v
Cooper. 2
ELEMENTS:
1.
Physical element: sufficient degree of physical control
2.
Mental element: intention to possess or to exclude others
Possession
is voluntary & consensual
CASES:
The Tubantia: P found wreck,
marked place with buoys. P in possession, as they had intent &
control. Control limited, but sufficient in circumstances. D
trespassed & P claimed ‘possessory title.’ P got
injunction to keep D away (only works for possession)
Parker
v British Airways Board: passenger
found bracelet in airway lounge. BA did not sufficiently manifest
intention to exercise control over lounge.
The
firmer your control, < need for intent.
ATTRIBUTES
AND SIGNIFICANCE OF POSSESSION:
Exclusiveness
“is essential. That doesn’t mean that several persons
may not in concert have & exercise that exclusive possession as
against the rest of the world” Moores
v Bourke - joint possession
Indivisible
- The common law does not treat ownership of goods as divisible into
lesser estates or interests in succession (present & future),
nor are there remainders or reversioners. Essentially it regards
such articles as the subject of absolute ownership, although
concurrent ownership may be either joint or in common: Knapp
v Knapp
Possessory
title: Possession = 9 parts of law; prima facie evidence of
ownership. Possessory title is as good as absolute title against
everyone except someone with better claim (concept of
relativity)
The
prior possessor usually prevails over subsequent possessor
In
real property, possession can confer a root of title: Gatward
v Alley
DEGREE
OF POSSESSION:
Custody:
physical holding or control of goods that falls short of possession
Actual
or defacto possession: an effective physical or manual
control or occupation evidenced by some outward act
Legal
possession: the state of being in possession in the eyes of
the law
Lawful
possession: based on gift, bailment
The
right to possession: highest form related to ownership
WRONGFULL
POSSESSION – JUS TERTII
A
person wrongfully in possession cannot defend themselves against
rightful possessor by arguing there is better title in the owner.
Jeffries
v The Great Western Railway: “a
wrongdoer cannot defend himself by showing that there was title in
some 3rd person; for against a wrongdoer possession is a
title.”
ABANDONMENT
Need
to show intention to relinquish: Re
Jigrose: throwing away but not
losing
‘Title
remains with original acquirer of prop until intention to abandon is
proved. Then becomes public right & is liable to be appropriated
by next occupier.’
4
– FINDING: find relevant category & apply above
tests
Armory
v Delamirie: the finder of a jewel,
though he does not by such finding acquire an absolute property or
ownership, has such a property as will enable him to keep it against
all but the rightful owner…may maintain a trover.”
Policy:
overriding objective is to reunite rightful owner with item
Finder
has superior rights against all but true owner (subject to
abandonment)
1.
FINDER v TRUE OWNER
Test
1: Has the item been abandoned? Re
Jigrose
Test
2: Does the finder have possession? The
Tubantia
Test
3: Does the finder have dishonest intent?
trespassing/
stealing/ selling straight away: Hannah v
Peel
not
taking reasonable steps to contact the true owner: Armory
v Delamirie
2.
FINDER v OCCUPIER/OWNER OF LAND/PREMISES
Test
1: Does the occupier/owner intend to possess?
If
item is attached then occupier would have stronger case (=
constructive possession: Elwes v
Brigg Gas Co)
Possession
is proved by control & manifest intent. Control is
measured by other people’s lack of access. Intent is an
intention to exclude others.
Public
place differs to private land because land has a manifestation of
intent to possess.
Bridges
v Hawkesworth: money found on shop
floor: finder got money
Parker
v BA Board: bracelet found in
airport lounge: finder got bracelet
NCA
v Flack:
$ found in tenant’s cupboard: tenant (owner) got $ as est.
intent
Test
2: Does the finder have possession &/or
dishonest intent?
Waverly
Council v Fletcher: true
owner unlikely to claim items embedded in ground &
law treats the owner/occupier of the land as a substitute owner
-
All possessors must prove poss & take reas measures locate true
owner
3.
FINDER v EMPLOYER
Test
1: Does the employment contract provide for such
cases?
General
rule that e’ees find for e’ers unless otherwise agreed:
Hannah v Peel
Test
2: Was employment the effective cause of finding
the item?
If
employment was effective cause of finding item, e’er gets the
item
Employer
argues that e’ee has mere custody & is possessing on e’ers
behalf: Sth Staffordshire v Sharman
If
employment only the incidental cause of finding item, the e’ee
gets item: Byrne v Hoare
policeman in a public place found ingot
employment not effective cause of him finding it; different if he was
doing a search etc.
Test
3: Does finder have possession &/or dishonest
intent?
4.
FINDER v SUBSEQUENT POSSESSOR
Test
1: General Rule: prior possessor = better
claim: Armory v Delamirie
However,
subsequent possessor will argue that they have possession which is
prima facie evidence of ownership
Test
2: Does the finder have possession &/or
dishonest intent?
Bird
v Town of Fort Frances: boy found $
under building & police confiscated: boy had better claim despite
trespassing (w/out dishonest intent)
5.
FINDER v THE STATE
Law
of treasure-trove is one of the oldest laws. It relates to only gold
or silver. AG v Trustees of British Museum:
If there is a prima facie intention that item was hidden, it belongs
to Crown unless a better title is shown (gold on farm)
4
– BAILMENT
BAILOR
= OWNER; BAILEE = POSSESOR
3
ELEMENTS:
Actual
or constructive delivery of goods by bailor to bailee
The
voluntary/consensual assumption of possession of goods by bailee
(physical element)
The
bailee knowingly in possession of those goods (mental element)
Here
Test
1: Who to sue and what causes of action?
Who
would you sue:
Cause
of action:
Potential
causes of action in contract and torts and detinue (assume
possession) and conversion (assume ownership) –
However
we can focus on bailment as it is an independent cause of
action (i.e. sui generis)
Test
2: Is there a bailment &/or sub-bailment & what
type?
A
commercial bailment sourced in contract and for reward was
created when ELEMENTS above are satisfied (Hobbs
v Petersham)
A
GRATUTIOUS BAILMENT –
bailment without reward; at will
Test
3
Sub-Bailment:
An authorised/
unauthorised sub-bailment arose where 【ee】transferred
possession of the goods to [or] with/without the authority
of the b’or – go to Test
3
Sub-b’ee owes all the CL
duties to b’or directlyrise b’ment
Test
3: Can the bailor sue the sub-bailee on the basis of
collateral bailment?
Step1:
A collateral bailment is established when:
The
bailor expressly/impliedly consents
to the sub-b or is bound to it due to ostensible authority or
estoppel and (The
Pioneer Container);
Step2:
The
sub-bailee voluntarily and knowingly takes
possession of the goods knowing that they belonged to someone
else –not need the owners true identity
(as long as there is a bailment); (Morris
v CW Martin) 【HERE】
Step3:
[As
sub-b’ment occurred, head b’or may sue sub-b’or for
failing to keep possession. May lead to terminated, sub-b’ment
also terminated]
Morris
v CW Martin where the
b/m is commercial, the sub-b’ee is liable to b’or
despite absence of a K’ual relationship – Go to Test
5
Test
4: What are the terms of the bailment?
Exclusion
clauses + other written and oral agreements
[Here]
Clause
10 stated [describe what it is]
Test
5: Is there a breach of bailment by Bailor?
Bailors
duties include:
Duty
to ensure goods are fit and safe for use (warn of hazards/defects
that may affect bailee + 3rd party). Thus, [Here －
both
ways]
Test
6: Is there a breach of bailment by Bailee?
Duty
to Take Care:
Reasonable
Care Test (Davis v Pearce Parking)
–Although there is a uniform standard of care for all types of
bailment (TNT v May & Baker), this standard may be raised
slightly higher as this was a case of commercial bailment
(Kehoe v Williams; Pitt Son v
Badgerie defines what’s reasonable). [Apply]
Burden
of proof:
B’ee：
i)
the existence of a bailment; (ii) damage resulted; (iii) loss/damage
was suffered [APPLY]
B’or:
(i) all reasonable care was taken OR
(ii)
the loss/damage would have occurred despite all reasonable care
(Hobbs). [APPLY]
Duty
to Return the Goods
Duty
to Redeliver (Jackson v Cochrane)
not
an absolute duty – no breach if b’ee acts reasonably
Can
be upon a specified time or within a reasonable time after the
bailor’s demand
Can
be to the bailor or a 3rd party
Non-delivery
– failure to deliver (omission). Only breached if bailee acts
unreasonably/negligently
Misdelivery
– acting inconsistently w/ bailor’s rights (ie.
conversion). May be strictly liable (liable even w/out fault)
Jackson
v Cochrane
Misdelivery is a distinct ground of liability and is
different from a mere failure to take reas care of goods
Authority
for misdelivery in conversion)
SCC
v West –Exclusion clause did not cover
misdelivery (see nxt column) which is a positive act
involving deliberate delivery or wilfully wrong delivery
[HERE]
reasonable belief; reasonable suspicion and should confirm
with b’or; if misdelivery may be liable even without fault
(ie. strict liability)
Test
6: Who is liable for the breach?
Does
the Exclusion Clause Exclude or Limit the Bailee’s Duty
of Care?
Incorporation
test –clause form part of the contract?
Signing
presumes consent to terms of contract (L’Estrange
v Graucob) [APPLY]
Reasonable
steps taken by EE to bring the clause to B’or attention.
As such, B’or may not be bound by that clause (Thornton
v Shoe Lane Parking).
『APPLY』
Is
the clause part of usual course of dealings
Construction
test – does the clause cover the breach?
Contra
preferentum rule – if clause is ambiguous, construe against
the person relying on it (bailee).
General
rule that the more serious the breach, the less likely the clause is
going to cover it
Bailee
can exclude liability for negligence only in clear and
unambiguous words
【APPLY】“[Clause]”
is wide enough to cover negligence but not misdelivery (SCC
v West).
[sub’ee]
may be able to rely on exclusion clause if it was a usual trade
exclusion clause Or could construe clause against them as
“customer” being a customer of [sub’ee or
head b’or] (more narrow reading) (CW
Martin)
-The
Pioneer Container – H: bailor bound by
exclusion clause in contract between bailee and sub-bailee
despite not being privy to contract – i.e. as the bailor
authorised consent to the sub-bailment, he consented to terms of the
sub-bailment
Could
construe the clause against as “customer” being a
customer of B’EE not his (more narrow reading) (CW Martin)
INTEREST
OF THE BAILOR
During
term of bailment the interest of the bailor is qualified by the
bailment
Bailor
has a reversionary interest
During
bailment at will the bailor has immediate right to possession.
If
bailment is for a term the entitlement is suspended
Bailor
can deal with his or her interest by transfer gift etc
INTEREST
OF THE BAILEE
Bailee
has a possessory interest in the goods carved out of bailor’s
interest
If
the bailor recovers the property in breach of the bailment the
bailor may be subject to an action for trespass, conversion or
detinue
On
expiry of bailment bailor is entitled to restoration of the goods or
direct bailee to deliver goods to a third party
OBLIGATIONS
OF THE BAILOR
Commercial
bailment
Have
right to bail goods ie owner or have possession allowing
sub-bailment
Goods
are safe & fit for use: s17 SGA
Due
care & skill: s74 TPA
Not
interfere with B’ee’s possession during set term of
bailment: Nominal Defendant v Morgan Cars
Reimburse
[B’ee’s] costs: Acme Mooring &
Pathing v S Spanglett
Gratuitous
bailment
Have
right to bail goods ie owner or have possession allowing
sub-bailment
Make
good damage or injury caused by faulty goods
Duty
to warn of potential hazards (no Aus authority): Derbyshire
Building
CASES:
Davis v Pearce Parking - car
stolen in a car park. B’ee obliged to take reasonable steps to
ensure car safe. Breached that duty. However, there was an
exemption clause on the ticket (simply amounted to licence) = not
liable
Pitt
Son & Badgery v Proulefco: wool
stored in warehouse destroyed by fire. Liable: failure to
take reasonable care because insecure fence & no sprinkler
Jackson
v Cochrane: misdelivery of caravan.
Bailee was liable for failure to exercise reasonable care
over the caravan; Houghland v RR Low:
loss of suitcase on bus;
TNT v May & Bake: goods
damaged during carriage: not liable as reasonable care taken.
TERMINATION
OF BAILMENT:
B’or
Demands Repossession of Bailed Goods: Only
possible in gratuitous contract – not in commercial contract
where there is a contracted duration of bailment Nominal
Defendant v Morgan Cars
Bailee’s
Authorised Delivery to 3rd Party: Subject to
contract: Sydney City Council v West;
Brambles Security Services Ltd v Bi-Lo
Bailee
Breaches Bailment Agreement: If B’ee breaches the
bailment in a way that is repugnant & destroys the basis of the
bailment then the bailment is deemed to have been terminated Union
Transport Finance
B’or
Transfer Goods To B’ee: B’or can decide to
sell or give [BG] to B’ee thus terminating the bailment.
There is no longer the need for the bailment as the ownership &
possession of the previously bailed goods now rests with the bailee
Motor Mart Ltd v Webb
Bailed
Goods Destroyed: The
destruction of [BG] = termination of the bailment. Possibility of a
breach in the bailee’s duty to take care. Pitt
Son & Badgery v Proulefco; A-G v Guardian Newspaper
Operation
Of Law: termination upon death; person writes will, gives
to solicitor, solicitor is [B’ee] of goods; upon death
beneficiaries become entitled to immediate possession of goods: Re
Aebly’s Wills
5
– PROPERTY TORTS
TRESPASS
TO LAND
Direct,
intentional, unauthorised entry onto land OR remaining after consent
withdrawn/expired; includes throwing of object on land
No
defence of necessity
Landlord
can trespass if tenant improperly excluded
TRESPASS
TO GOODS
Wrongful,
intentional, direct interference with chattel in actual
possession of another: Hutchins v Maugham
Title
to sue: can include bailor in bailment at will where possession
demanded – but if b’ee voluntarily delivers possession
to a 3rd party no action in trespass for bailor as
delivery of possession was lawful
Damage
not necessary ie use of car or return of bottle unharmed may be
trespass: Penfolds Wines v Elliot
CONVERSION
(‘trover’)
Dealing
with goods adverse to P’s title: mere removal not sufficient:
Fouldes v Willoughby
Dominion
inconsistent with P’s title: Damage to property; Selling the
chattel
Innocence/ignorance
of the P’s right not a defence (eg buying & selling stolen
goods) - may be indirect
Delivery
of goods to a 3rd party with the intent to pass
ownership, or even possession, constitutes conversion: Cook
v Saroukos
Title
to sue depends on the right to poss not proof of absolute ownership:
NCA v Flack. Eg b’ee in breach of bailment: Motor
Dealers CC v Overland
DETINUE
Tortious
or wrongful detention of goods & a refusal to hand them over to
a person with a right to immediate possession who has formally
demanded their return: Russel v Wilson
Right
of action accrues at time of the refusal: Bellinger
v Autoland
REAL
PROPERTY
FRAGMENTATION
OF PROPRIETARY RIGHTS
6
– DOCTRINE OF TENURE – direct importance now
minimal
Means
ultimate owner of land is R. R means state government unless the C’th
has acquired the land: Williams
v AG.
Mabo
v QLD (no2) (1992): DofT is part of CL of Aus &
applies to all grants & interests in land other than those
held under Native Title.
Quia
Emptores 1290 & Tenures Abolition Act 1660 imported
into Aus with result that all lands granted in fee simple were
granted in free & common socage (s20
PLA) – only incidents of tenure which have
attached to socage tenure in Aus are quit rent & escheat
(bona vacentia = ownerless prop: die without will/next of
kin, land goes back to the R (s35 Succession
Act 1981))
7
– DOCTRINE OF ESTATES – What is the tenant’s
interest in the land?
No
person can own land absolutely. What a holder of land has is an
estate in land. An estate in land is a collection of rights that can
be exercised over & in respect of land for a particular duration.
Necessary to determine what the ‘owner’ is entitled to ie
nature of the bundle of rights; Owner of freehold land has ‘seisin’
or the entitlement to possession of land.
CLASSIFICATION
OF INTERESTS BY DURATION
1.
ESTATES OF FREEHOLD: common feature is duration is uncertain
(A)
FEE SIMPLE: maximum interest in land
Fee
inheritable; Simple - inheritable to everyone & not limited like
the fee tail; Largest estate known to English law: lasts until the
holder dies without successors; once fee simple is granted, there can
be no further grant to 3rd p
1.
Determinable fee simple: ‘while’
‘during’ or ‘so long as’
granted
& will end automatically on occurrence of specified event that
may or may not occur eg: G: To X in FS for so long as the land is
used as Uni
If
event occurs land reverts to grantor who has ‘possibility of
reverter’
If
determining event becomes impossible then fee simple become absolute
ie ‘To B in fee simple until X marries & X dies a
bachelor’
Must
not be something that must occur ie To X in fee simple until January
2007 – inconsistent with fee simple
If
determining event is void (ie uncertain or against public policy),
entire interest in unenforceable as the determining even is inherent
in the grant
2.
Defeasible or conditional fee simple: ‘but
if’ or ‘on condition that’
Fee
simple defeasible by condition subsequent ie fee simple granted in
absolute terms but qualified by a super-added condition of
defeasance. Eg to A in FS but if the land ceases to be used as a Uni
it shall return to G
If
condition breached grantor has right but not duty to re-enter –
fee simple continues until grantor re-enters.
If
condition of defeasance is void for uncertainty or against public
policy the conditions fall away & fee simple takes full effect.
*Public
Policy: Conditions may be void on public policy grounds because
1. illegal or immoral (eg. condition prohibiting
marriage; encouraging divorce): Zapletal v
Wright: invalid for promoting &
illicit relationship – condition fell away & fee simple was
unconditional; or 2. restricts alienation rights:
Hall v Busst: contract
of sale & option; Partial Restraints In
re Macleay: condition to never sell
outside family – valid as limited; Elton
v Cavill: requiring consent of
co-owners to sell interest – invalid restraint on alienation.
(B)
FEE TAIL (ABOLISHED)
Continued
so long as the original tenant or any of his or her lineal
descendants survived ie children; grandchildren or great
grandchildren; could be limited to male or female descendants or both
sexes; estate terminated if you died without lineal descendants; now
abolished s19, 22 PLA
(C)
LIFE ESTATE
-
lasts for a life only (ie to X for life);
-
estate pur autre vie = a life estate granted to one person
where the estate is measured by the life of another (ie G: To X for
the life of Y (or G))
2.
ESTATES LESS THAN FREEHOLD date of termination is certain
or capable of being made so
(A)
LEASEHOLD: Must come to an end on
or before a given date - therefore an estate less than freehold. eg
5yr lease from 1 June 2004 - 31 May 2009
CLASSIFICATION
BY POSSESSION
1.
ESTATE IN POSSESSION: gives
holder an immediate right to possession & enjoyment of land; not
necessary to have actual physical possession ie you may lease land
but you must have present right to possess the land.
2.
ESTATE IN EXPECTANCY: estates
that allow you to have possession of land at a future time
(A)
REVERSIONS: Reversions occur when a
grantor grants lesser estates (less than fee simple) & at the
termination of those estates the land “reverts back” to
the grantor (eg. G: Blackacre to A for life = A - life estate
in possession; G - fee simple reversion)
(B)
REMAINDERS: When the owner of the
fee simple grants a particular (ie smaller) estate (less than fee
simple) to one person & then in the same instrument grants
another estate in the same land which will take effect on the
termination of the prior estate. (eg. G: Blackacre to A for life,
then to B for life = A has a life estate in possession; B has a life
estate in expectancy (remainder); G has a fee simple reversion)
1.
Vested Remainder: Where the owner is given a present &
unqualified right to possession of the land as soon as the prior
estate comes to an end. G : Transfers Blackacre to A for life,
remainder to B in fee simple. Preconditions: Pre conditions
for VR: 1. the person who is to take the estate must be ascertained
2. there is no condition precedent attached to the estate other than
the termination of all preceding estates – if either
condition not met…
2.
Contingent Remainder: G:
Transfers Blackacre to A for life, fee simple remainder to A’s
eldest son living at A’s death
-
contingent as until A dies impossible to say who A’s eldest son
living is
-
a remainder is contingent if either of the two conditions for vesting
are not met at the time of the grant or devise (if by will)
8
– EQUITY AND EQUITABLE ESTATES (legal v beneficial
ownership)
Development
of ‘Use’ (‘Trust’):
-Trusts
were developed in the 13th century to overcome problems of tenure; to
avoid forfeiture or loss of tenure (eg wardship, escheat)
-The
grantor conveyed the land to someone to hold legal estate as feoffee
to uses (i.e. trustee) for cestui que use (i.e. beneficiaries).
-Only
Courts of Equity recognised beneficiaries’ interests & the
beneficiaries had an equitable estate in land. Equitable interests
are defeated by legal interests see PLA
s30 (2) & LTA s55.
E.g.
1: ‘To A for the use of B’ or ‘To A on trust
for B’–A holds legal estate (fee simple) as trustee for
B, while B holds equit. estate as beneficiary (equit. fee simple) &
G has nothing as he/she has granted legal fee simple to A.
E.g.
2: ‘To A on trust for B for life, then for C for life, then
for D in fee simple’–A has legal fee simple as trustee, B
has equitable life estate in possession, C has equitable vested life
in remainder, D has equitable vested fee simple remainder & G has
nothing.
Equity
in land law also gives rise to the possibility of equitable
interests being granted in other areas where no legal interest
exists: eg. Specific performance for contract of land – ‘equity
looks on that as done which out to be done’
-
all equitable remedies are discretionary
9
– TITLE TO LAND
SEISEN:
formal legal ownership of a freehold estate, as opposed to mere
beneficial ownership or possession (leasehold).
CL
rule: there should never be an abeyance (gap) of seisin eg G:
To X in fee simple one year after my death.
TITLE
v GOOD TITLE:
‘X
has title to the land called Blackacre’: means X has
a right to possession (not necessarily the best)
‘X
has good title to Blackacre’: (a) X can
successfully resist any claim for possession of the land; (b)
if X is dispossessed she can recover possession of Blackacre from the
person that dispossessed her
POSSESSION
IS THE ROOT OF LAND TITLE: At CL, P in an action for the
recovery of possession of land need not prove a better right to poss
than that of all other ppl – P need only prove better
right than D: Ocean Estates v Pinder;
Asher v Whitlock: search for better title not
best title (relativity of title)
LIMITATIONS
OF ACTIONS ACT 1974: s13: ‘ An action
shall not be brought by a person to recover land after the expiration
of twelve years from the date on which the right accrued to him or,
if it first accrued to some person through whom he claims, to that
person.’ See adverse possession
section.
s14:
limitation period commences when claimant has been dispossessed or
when claimant discontinues possession (whenever right of action
accrues)
s29
- extension if disability for 6yrs after end of disability (e.g.
minor, jail, insane): max 30yrs total after right of action accrues:
Re Johnson
10
– ACQUISITION AND TRANSFER OF PROPRIETARY INTERESTS
METHODS
OF ACQUISITION AND TRANSFER
1.
By Transfer: (a) Consentual (voluntary):
sale, gift, trust, succession; (b) Non-consensual
(involuntary): bankruptcy, compulsory acquisition, intestacy
2.
By Original Acquisition: creation, taking possession,
conquest (land), application of equity (constructive trusts,
estoppel), fixtures, accession.
CONVEYANCING
‘Creation,
transfer or extinguishment of an estate, interest or obligation…of
property both real & personal’
Public
conveyancing: Feoffment ŵ livery of seisin: Public
demonstration to tell village of new owner. Statute of Uses 1535
marked the beginning of the decline of public conveyancing. PLA 1974,
s8 abolishes it.
PRIVATE
CONVEYANCING – out of use
Lease
& release: Use of documentary conveyance - title deeds.
DEFECTS:
nemo
dat quod habet: you can only give title if you have title e.g.
A sells to B who sells to C. X forges transfer to B
B had no title to give. Goes to A.
Docs
may be valid but incomplete e.g. easement omitted
If
docs lost or destroyed reliance on secondary evidence
Docs
held by individuals = high potential for fraud
Boundaries
uncertain
Costly
searches, waste of time & labour
SYSTEMS
OF TITLE IN QLD
Land
held under Crown Lease or Licence: S15
Land Act 1994: State May Lease Unallocated State Land;
Mineral Resources Act 1989 S387: Register For Mining
Lease & Tenures
Unregistered
Land: Land other than land
registered under LTA, or Crown Leasehold under Land
Act; usually referred to as
‘old system land’ or ‘general law land’; QLD
no old system land is left.; still exists in VIC & NSW
REGISTERED
LAND*** (bulk of course)
Land
registered under the Torrens statute the Land
Title Act 1994
DEED
REGISTRATION SYSTEM: Old System Title
Registration
Act (NSW) 1825; Registration of
Deeds Act 1843 (NSW)
Part
18 Division 3 Property Law Act 1974: Provided admin
procedure to allow rego of deeds/instruments at registry by lodging
copies of deed/instrum
Date
& time of registration endorsed on original & duplicate
determined priority
Effect
of registration was to give the instrument priority over all other
instruments that were unregistered or registered at a later time.
–
e.g
X grants 2 mortgages – first registered has priority, not first
granted
Limitations:
If
you had notice of a prior interest you were not bona fide
(s246 PLA)
Registration
does not confer title ie chain of title only as strong as weakest
link – nemo dat rule. ie system of reg of title
not a system of title by reg
Still
required detailed search of chain of title
Had
the advantage of a government registry
Private
conveyancing & the Deeds Registration system both had
their limitations…so enter TORRENS TITLE,
the modern registration system.
11
– TORRENS TITLE
Registration
confers title: Breskvar
v Wall: The torrens system
of registered title is not a system of registration of title but a
system of title by registration…the title it (the
register) certifies is not historical or derivative. It is the title
which registration itself has vested in the proprieter.
Designed
by Robert Torrens to overcome defects in deeds registration system
(uncertainty (nemo dat rule); complexity; expense; delay)
Sought
system where act of registration conferred title not the
document which is registered.
Legislation
development: 1858 Real Property
Act (S.A.); 1861-1952 Real
Property Acts (Qld)
1994 Land Title Act (Qld).
THREE
FUNDAMENTAL PRINCIPLES OF THE TORRENS SYSTEM
1.
MIRROR PRINCIPLE
Everything
that can be registered has been registered & registered
proprietor’s title is immune from attack from anyone holding an
unregistered interest
e.g
A holds fee simple interest in Blackacre; X steals A’s title
deed & forges A’s name on a transfer to B; B is a bona fide
purchaser unaware of forgery; Title to Blackacre issues to B; B
transfers to C; C builds a house on Blackacre; A discovers forgery &
brings an action against C for recovery of land. At common law A
would be successful. Under Torrens Title, C can rely on B
being shown on register as registered proprietor to block A.
2.
CURTAIN PRINCIPLE
It
should not be necessary for a prospective purchaser or mortgagee to
investigate the history of a registered proprietor’s title
-
If an interest is not registered you are not bound by it.
-
It also means you as bona fide purchaser are not affected by a
defect in the registered proprietor’s chain of title
-
Registration of a void instrument can confer a valid title.
3.
INSURANCE PRINCIPLE
If
as a result of the operation of the system a party suffers loss or is
deprived of his or her land, monetary compensation for loss will be
paid
-
E.g. A in above example would be compensated (& action
against X)
DIFFERENCES
BETWEEN OLD TITLE AND TORRENS TITLE
Title | Title |
Reg | Reg |
Documents | Register |
Validity | Validity |
Notice | Mere |
Mortgage | Mortgage |
Remediless | Compensation |
CURRENT
GENERAL LEGISLATIVE SCHEME OF TORRENS TITLE:
1.
CORRELATION BTW LTA 1994 AND
PROPERTY LAW ACT 1974
LTA
trumps PLA. If nothing in
either, look to CL. PLA s5(1)(b):
this act shall apply to land under the provisions of the LTA
1994, including any lease of such land, but subject to
that act”
2.
ADMINISTRATION OF THE LTA
Registrar
of Titles is the public official whose primary responsibility is to
oversee registry. This is pursuant to Part 2
Div 1 LTA.
3.
CERTIFICATE OF TITLE
Today
a CT reflects the current references on the register. Under s42
LTA you can request a CT by making written application
to registrar of titles. To then mortgage the property & register
it the CT is surrendered for cancellation s154
LTA. Registrar will issue a new CT if mortgagee
consents s42(2).
4.
REGISTER – PROCESS OF REGISTRATION
Land
Registry & Registrar’s Title: ss7, 27-36
Registrable
documents & registration requirements: ss10–14, 48A–48B,
60–63, 153–167
Certificates
of title: ss42 – 46
Order
of registration - priorities: ss173 – 179, 183
ss173,
174: registration occurs when particulars of instrument noted in
register
s175:
instruments deemed to form part of the register from date of
lodgement
s177:
documents registered in order of lodgement- note exception
s177(3) (if documents have no relation to each other – any
order) *also, if registration disrupted by caveat or
settlement notice – becomes issue of better equity.
s178:
priority determined according to date document lodged for rego,
not date of execution, assuming document proceeds to registration &
is not rejected
s77:
able to vary priority of mortgages with agreement of mortgagees
s157:
possible loss of priority if instrument rejected for non
compliance with requisition within time
s181:
instrument does not transfer/create interest in a lot at law
until registered
Register
reflects instruments (def sch2, s4) lodged for registration
*s175
- instruments after registration deemed to form part of the register
IMPORTANCE
OF TITLE SEARCHES: Bursill
Enterprises v Berger Bros: Bursill
purchased land that was subject to an easement & transfer of
airspace. Was aware of easement but not transfer as it was not
clearly stated on CT, thus argued not bound by it. Ruled against
Bursill - needed to check the easement document to check its true
nature - can’t just take the CT at face value. Can be argued
that this upsets Curtain Principle.
TYPICAL
CONVEYANCING TRANSACTION IN QLD
Agreement
reached on price; spec conditions etc
Execution
of written contract of sale (equitable title if C valid &
enforceable)
Deposit
– usually 10% or less held by real estate agent
Time
to completion often 30 days approximately (normally time of the
essence of the contract )
Purchaser
will investigate title to ensure no encumbrances or defects
Under
REIQ contract risk passes to purchaser – cover note required
Transfer
documents prepared by purchaser’s solicitors. Often purchaser
solicitor or financier for purchaser will lodge settlement notice
(or less commonly caveat) to preserve spot in the queue for
registration
Vendor
must take steps to remove or provide release documents to purchaser
on completion
On
completion bank cheque for balance purchase price while purchaser
&/or its financier receives transfer documents & release(s)
of mortgage
Purchaser
or financier attends to reg of documents received at completion
Legal
title passes to purchaser when transfer registered
UNREGISTERED
INTERESTS (can be enforced in personam)
Process
of transfer: contract to purchase land
execution of transfer
completion
registration
While
an interest is not transferred until registration, a party may have
an equitable interest in land pending registration:
Equitable
interest arises from contract underlying the unregistered instrument.
For
priority between competing equitable interests, see end of caveat s.
12
– INDEFEASIBILITY OF REGISTERED TITLE (Torrens Title
Scheme)
DEF:
“not liable to be defeated, made void, done away with; that
cannot be forfeited”; ‘Indefeasibility is a shield which
will ward off most attacks on a title, but which will be pierced with
fatal results to the title which it guards, by the sword of a later
indefeasible title’
GENERAL
THEMES:
Registration
distinguishes all preceding registered & unregistered interests
General
rule: indefeasibility of title cannot be altered by any defect in
the transaction as registration validates any defect.
Indefeasible
title = current particulars in the freehold land registrar
(s38)
“Holds
the interest subject to registered interests affecting the lot but
free from all other interests” (s184(1))
Case
law & LTA limit
the scope of indefeasibility, making it narrower than the literal
meaning
PRIORITIES
UNDER THE LTA:
EFFECT OF REGISTRATION
Creation
of legal interest in land (s181) which is vested in
the registered person (s182)
Creation
of ‘indefeasible title’ (s37)
Indefeasibility
(s184) & exceptions to indefeasibility (ss185–187)
Potential
compensation claims (ss188–190)
Schedule
2 definitions of ‘registered owner’ (RO-legal owner of
fee simple) & ‘registered proprietor’ (RP-person
entitled to legal interests in land eg mortgages, leases etc)
NOTICE:
COMMON LAW v TORRENS TITLE
1.
Actual notice; 2. Constructive notice; 3.
Imputed notice
s256
PLA: Purchase of legal estate
with notice of equitable interest with intention of not honouring
constituted a species of equitable fraud.
Torrens
title reverses this (s184(2)(a)
LTA) – mere notice of
equitable interest not sufficient – reg defeats it (Friedman
v Barrett)
REGISTRATION
OF A VOID INSTRUMENT – deferred v immediate
debate
e.g.:
A is owner of fee simple in Blackacre under LTA; Z
forges A ‘s signature on transfer to B; B deals with Z
as A’s agent & is unaware of fraud (transfer to B is void
due to forgery); B registers the transfer & certificate issues to
B; B then transfers registered title to C.
A,
B & C are innocent - who wears the loss? In the absence of fraud
by party registered does the registration of a void or voidable
instrument immediately confer indefeasible title? I.e.
deferred = B’s rego not valid, but C’s is;
immediate = B’s title valid upon registration
1.
DEFERRED INDEFEASIBILITY: almost out of favour in Aus esp
QLD
1.
Indefeasibility is deferred or postponed until the next valid
transaction (i.e. title acquired under the registered void instrument
isn’t indefeasible)
2.
Favours the original RP/RO.
-
Found favour in Aus prior to 1966: Clements
v Ellis (1934)
-
Policy argument in favour is that onus of ascertaining that the
person purporting to deal with the property actually has the
authority to deal with the property should lie with the party dealing
with that person: Ex parte Davy
2.
IMMEDIATE INDEFEASIBILITY: strongest Aus & esp QLD
position
1.
Indefeasibility is conferred immediately upon registration
irrespective of validity of the instrument or transaction (registered
party must be w/out fraud)
2.
Favours the subsequent RP/RO
-
Boyd v Mayor of Wellington
(1924) & Frazer v Walker
(1967) settled debate in NZ in favour of immediate indefeas
-
Breskvar v Wall
(1971): HCA confirmed immediate indefeasibility approach
EXCEPTION
TO IMMEDIATE INDEFEASIBILITY: ‘Fictitious Transferee’
Gibbs
v Messer (1891): Cresswell (solicitor) forged a
transfer of Messer’s land to a fiction person (Hugh Cameron).
Cresswell then forged a mortgage on
behalf of Hugh Cameron to obtain loan from McIntyres. Privy Council
held that Messer was not liable for the mortgage, it was invalid &
defeasible. McIntyres could not use the Statue.
Narrowing
the ratio in Gibbs v Messer:
Registration
of a void instrument does not confer an indefeasible title even if
the person has acted in good faith – widest (deferred
indefeasibility)
Registration
of an instrument which is void because it is a forgery does
not confer an indefeasible title even if the person who became
registered acted in good faith - narrower
Registration
of an instrument executed by a forger using a fictitious name does
not confer indefeasible title even if the person registered acted in
good faith – very narrow & current law in QLD.
Applied
in ANZ v Barns:
‘fictitious = dead, non-existent, dissolved co’.
However,
it has been suggested that the decision in Gibbs
is inconsistent with the principle that it is registration that
passes title not antecedent transfer – Gibbs
says principle does not apply to fictitious ppl. Nothing in LTA
to support this view – purely CL.
-
If same facts applied today, likely that the McIntyre’s
mortgage would be indefeasible by registration – i.e. no need
to examine a good derivative title
13
– EXCEPTIONS TO INDEFEASIBILITY PRINCIPLE
EXPRESS
EXCEPTIONS IN LTA s184(3):
FRAUD
S184(1):
Registered proprietor of an interest in a lot
holds the interest subject to registered interests affecting the lot
but free from all other interests.
S184(2):
Not affected by notice of an unregistered interest
S184(3):
Above sections do not apply to (a) exceptions in s185 or (b) if
there has been fraud by the registered proprietor, whether or not
there has been fraud by person from whom the reg proprietor has
derived reg interest
DEF
& NOTICE: Torrens fraud is distinct from CL &
equitable fraud
Certain
requirements:
Fraud
must relate to the current registered proprietor (or his
agent) - unless he can be implicated in the fraud, fraud on the part
of a predecessor in title will not make the current registered
proprietor defeasible
actual
knowledge of predecessor’s fraud is sufficient to implicate
registered proprietor: Schultz v Corwill;
Assets v Mere Roihi
Requires
actual dishonesty by registered proprietor (or agent)
Waimiha
Sawmilling v Waione Timber: “[i]f the object of a
transfer be to cheat a [person] of a known existing right, that is
fraudulent”
Latec
Investments v Hotel Terrigal: ‘Moral turpitude
there must be; but a designed cheating of a reg proprietor out of
his rights is clearly a fraud’
Grgic
v ANZ: ‘actual fraud, personal dishonesty or moral
turpitude’
Must
be a casual link btw fraudulent act & obtaining of registered
title:
Bank
of SA v Ferguson: must operate on the mind of the person
said to have been defrauded or induced detrimental action by that
person.
Effect
of Fraud on Registered Title: Title is defeasible
e.g.
Albert owns fee simple interest in Lot 10; Elana forges a
transfer to herself. The transfer is registered; Elana is
registered proprietor but because she is guilty of fraud
Albert can successfully attack Elana’s title (s184(3)(b).
If
Elana had transferred to Bill he would have obtained indefeasible
title if he was bona fide (but if he was aware of fraud, then
he is guilty of fraud: Assets)
FRAUD
AGAINST A PREVIOUS REGISTERED PROPRIETOR
If
a bona fide purchaser for value becomes proprietor by
registration of a void or voidable instrument the victim of fraud
loses the right to recover poss & is left with action for
recovery of damages from Assurance fund
Herron
v Broadbent: H’s=reg
proprietor. Broadbent “rouge” solicitor held CT & got
a reg mortgage over property with Hussey. H: Herron’s
got the property back subject to a mortgage to Hussey, had to apply
for compo for mortgage
i)
What constitutes fraud? Fraud v Negligence etc.
Grgic
v ANZ: Grgic reg owner of prop;
son forged sign. & obtained mortgage on property through ANZ;
defaulted on loan- ANZ claimed property. H: Title
indefeasible: ANZ was less than meticulous, but did not seek
to take adv of Grgic = NO FRAUD so has title. Grgic has separate
action against son.
But,
if the mortgagee had actual knowledge that mortgage is forgery, then
mortgagee is also guilty of fraud & title is defeasible: Young
v Hoger. The same is true if the mortgagee does not have
actual knowledge but this is due to ‘wilful blindness’
or ‘reckless indifference’ Waimiha
Sawmilling
e.g.
AGC v De Jager:
bank employee knew signature not
properly witnessed but did not know it was a forgery = FRAUD
National
Bank Ltd v Maher: Registration
of mortgage fraudulent where employee had included in mortgage
instrument particulars of additional land after instrument executed
by mortgagor & then lodged for registration: crux of fraud is
misrepresentation made to registrar
Russo
v Bendigo Bank: Russo’s son
forged signature on mortgage, young solicitor falsely claimed
to witness signature: carelessness, not out of dishonest intent = NOT
FRAUD
Note
recent amendment to LTA in relation to registration of
mortgages:
s
185 (1A): a registered mortgagee does not obtain indefeasibility
if failure to comply with the requirements of ss 11A(2) & B(2)
if it was executed by someone other than the registered proprietor
of the lot
S11
A, B: reasonable steps to ensure the person who executed
mortgage is who they claim to be
Reasonable
steps = based on the practices outlined in the manual of land
title practice s9A(2)(c) for the verification of identification of
mortgagors
Records
of these reasonable steps should be kept by the mortgagee for 7
years & may be asked about & required to produce this
evidence
FRAUD
AGAINST THE HOLDER OF AN UNREGISTERED INTEREST
184(2)
The registered proprietor is not affected by actual or
constructive notice of an unregistered interest affecting the lot
ISSUE:
does notice of an unregistered interest couple with the knowledge
that registration of an adverse interest will defeat that interest
constitute ‘actual fraud’? – dishonesty, moral
turpitude etc.
General
rule: Merely to take a transfer with notice or even
actual knowledge that its registration will defeat an existing
unregistered interest is not fraud: Mills v
Stokman; Bahr v Nicolay. There must be a
fraudulent statement or action to induce the other party to transfer
the instrument:
Loke
Yew v Port Swettenham Rubber: PSR
purchased land from Eusope, 58 acres of which was under an
unregistered lease to Loke Yew. PSR made a statement that induced
Eusope to sell (implied he would leave Loke). Once transferred PSR
didn’t acknowledge the lease = FRAUD
CAN
FRAUD SUPERVENE AFTER REGISTRATION?
The
HCA is divided on this issue. Bahr v
Nicholay: Mr & Mrs B sold land to N under the
condition that they would have it leased back to them with an option
to repurchase. N signed, sold to T on same conditions – T then
refused to acknowledge their interest. H: 2 Judges said no it
can’t; 2 judges said yes it can; 1 judge applied in personam
(all agreed to in personam)
-
Better view is that fraud should be restricted to intent prior
to registration – in personam exception can cater for
fraud after rego
FRAUD
BY AN AGENT
Where
the RP is registered through fraudulent conduct by his A, then RP
will be liable (& his reg’d title defeasible) if the fraud
is within the scope of A’s actual or apparent authority:
Schultz v Corwill Properties
s185(1)(a):
IN PERSONAM EXCEPTION
A
registered proprietor of a lot does not obtain the benefit of section
184 for the following interests in relation to the lot--(a) an equity
arising from the act of the registered proprietor.
RULE:
A RP cannot ignore personal obligations created by
contract OR trust or fiduciary duty: Bahr
v Nicholay; Tataurangi v Mua
Carr; Frazer v Walker
The
title purchaser who not only has notice of an antecedent
unregistered interest but who purchases on terms that he will be
bound by the unregistered interest is subject to that interest.
Equity will compel him to perform his obligation: Valbirn
v Powprop; Bahr v Nicholay
CASES:
Tara Shire Council v Garner:
G’s sold land to Council, transfer never
reg’d. 2yrs later sold other parcel of land to Arcape, the
council’s land was also mistakenly included in this transfer.
Despite apparent previous agreement prior to transfer, Arcape refused
to recognise council land. HELD: Davies J in the minority=
Arcape were not bound by in personam because there was no
acknowledgement or agreement to recognise the interest vs Majority=
All that is needed is knowledge of circumstances that would indicate
facts to honest & reasonable person (see Barnes).
Michael likes the view of Davies.
Barnes
v Addy: Potential liability.
Categories of knowledge: Baden
v Societe Generale: Actual
Knowledge, Wilful shutting of eyes, Wilfully & recklessly
failing to make inquires as an honest & reasonable person,
Knowledge of circumstances that would indicate facts to h. & r.
person, Knowledge of circumstances that would put honest & reas
person on inquiry
LHK
v Kenworthy: Didn’t
follow Davies. QLD bound by Tara
Shire
Mercantile
Mutual Life Insurance v Gosper: Mr
G forged variation of mortgage on his wife’s land 2:1
held mortgagee’s unauthorised use of certificate of title to
procure registration created personal equity entitling Mrs G to
rectify the register
s185(1)(b):
SHORT LEASES
A
reg proprietor of a lot does not obtain the benefit of s184 for the
following interests in relation to the lot—(b) the
interest of a lessee under a short lease.
Means
a lease: (a) for a term of 3 years or less; or (b) from year to
year or a shorter period (s4, Sch2)
A
short term lease does not need to be registered: will bind a reg
proprietor as it is an express legal interest: Deventer
v B.P Australia
To
be read in conjunction with s185(2):
Does
not grant short lease lessee right to acquire
fee simple or other reversionary interest on or after ending of
the short lease
Will
not protect an option to renew beyond 3 years unless registered
(but will protect options up to the 3yr mark)
Eg.
A leases Blackacre to B for 3 years + 3 year option (unregistered); A
sells fee simple to C after 1 year; C is bound by the lease for the
balance 2 years s185(1)(b) but not bound by option - s 185 (2)
But:
if option exercised before registration, new term protected:
Re
De Jersey: Lease for 3 years to de Jersey unregistered
+ option to renew 3 years; option granted just prior to sale of land;
Tenant sought declaration new lease enforceable against respondent;
H: as new 3 yr term created prior to registration respondent
bound
Re
Eastdoro: Reg option periods >3yrs will ensure they are
protected
s185(1)(c):
OMMITTED OR MISDESCRIBED EASEMENTS
Def:
‘a right annexed to land to utilise other land of different
ownership in a particular manner....or to prevent the owner of the
other land from utilizing his land in a particular manner.’
S185(1)c)A
reg proprietor of a lot does not obtain the benefit of s184 for the
following interests in relation to the lot—(c)
the interest of a person entitled to the benefit
of an easement if the particulars of the easement have been omitted
or misdescribed in, the freehold land register.
S185(3):
An easement will be taken to have been omitted if:
Easement
was in existence when the lot burdened by it was 1st
registered but particulars never recorded in the register
Easement
previously recorded in register but current particulars do not
include the easement particulars
Easement
was lodged but as a result of an error in the Titles Office have
never been registered
But,
if an easement is created after the land was brought under
Torrens statute but is never registered because it is never lodged
for registration (e.g couldn’t be bothered) it will not bind
the servient tenement once the land has been transferred to a 3rd
party: Stuy v BC Ronalds
Registered
v Equitable: Prior to
registration, grant of an easement is equitable only: only
enforceable in personam between parties to easement, to
make in enforceable against the world, it must be registered
Once
you have determined that an easement falls within the provisions of
s185(1)(c) LTA
such an easement will be an absolute exception to the
indefeasibility & will bind a servient tenement, even if that
servient tenement has been transferred to a b/f purchaser: James
v Registrar General: A registered
easement was omitted on a new CT: property was transferred twice:
Registrar noticed mistake & added it on: Current owners were not
happy & were allowed to get compensation
Pre
1975: s198 PLA:
Could acquire an easement by prescription, i.e. you used land for
>20 years, could claim easement. No longer possible –
but if easement acquired by prescription prior to 1975, binding
despite no reg.
s185(1)(d):
ADVERSE POSSESSION
A
reg proprietor of a lot does not obtain the benefit of s184 for the
following interests in relation to the lot—(d) a person who, on
application, would be entitled to be reg as owner because the person
is an adverse possessor
Def:
Adverse poss is against the title evidenced on the CT
3
STEPS TO ADVERSE POSSESSION:
1:
Satisfy CL requirements
Must
be: open, not secret; peaceful, not by force; & adverse; not by
consent of the true owner: Mulcahy v
Curramore
Cannot
be adverse if with consent or under lease or agreement
Claimant
must show factual possession (physical) & an intention to have
exclusive possession (mental): Powell v
McFarlane
Adverse
possession need not be by the same person
can aggregate successive periods of possession (Mulcachy
v Curramore)
But
need continuous possession s19(2):
Temporary cessation ok if land is unworkable (Nicholas
v Andrew) or during non-growing season (Bligh
v Martin); Possession need not be continuous day to day
(Re Johnson)
Factors
to considered in establishing AP: paying rates (Quach
v Marrickville Municipal Council); cultivation; Erecting &
maintaining fences- may be useful evidence of occupation to the
exclusion of others but absence will not prove lack of possession: Re
Johnson
2:
Satisfy the Limitations of Actions Act Requirements
S13:
An action shall not be brought by a person to recover land after the
expiration of 12 years from the date on which the right of
action accrued to that person or, if it first accrued to some person
through whom the person claims, to that person
s14:
Right of action accrues on date of dispossession or discontinuance of
possession (abandonment) but pursuant to s19
can only accrue when there is someone in adverse possession i.e.
merely leaving land vacant will not start limitation period
s19(2):
limitation period will start afresh upon cessation of adverse
possession
s29
& s5(2): Person under disability: extension for 6
years after end of disability up to max 3O years from right of action
Re
Johnson: If the true owner’s identity is not
established, limitation period will not expire until 30 years after
the adverse possessor went into possession
3:
Satisfy & Survive the statutory procedures under LTA (s99-)
s99:
Person can make application for adverse possession with
documentation; s102:
Registrar has the power to refuse application if not satisfied with
the info & documents establish AP
s103:
Notice of application to registered prop, owners of adjoining lots &
others registrar specifies. Public notice giving date to lodge caveat
by interested party.
Caveat
Stage: s104-s107: gives a person
claiming an estate or interest in land chance to lodge caveat before
possessor becomes reg owner
Ss108-108B:
If: no
caveat lodged, or caveator unable to establish claim, or
caveator agrees to rego of lesser interest & registrar
satisfied applicant is AP: registrar registers applicant as owner &
removes previous reg proprietor.
s185(1)(e):
PRIOR CERTIFICATE OF TITLE
The
general rule is that in the case of two CT’s purporting to
include the same land, the earlier in date prevails, whether the land
comprised in the later certificate be wholly, or only in part,
comprised in the earlier certificate: Registrar
of Titles v Esperance Land Co.
s185(1)(f):
FAILURE TO CANCEL FOLLOWING A TRANSFER
Where
a property is transferred from A to B & the registrar fails to
cancel A’s CT - shows A as reg proprietor. 2 CT’s. B’s
interest will prevail over A’s.
s185(1)(g):
WRONGFUL INCLUSION OF LAND
The
benefits of indefeasibility are not conferred upon a registered
proprietor in relation to land wrongly included in an indefeasible
title. Where land is wrongly included in an indefeasible title, the
true owner, rather than the registered owner, retains title to the
land: Marsden v McAlister. Where
there is a dispute, the court will take into account extrinsic
evidence to determine where the true boundaries are: Overland
v Lenehan. Where a plan is proven to wrongly include Crown
Land the reg’d proprietor does not have Indef. Leader
v Beames:
Guy added sand to river bank & he was allowed to claim it.
POWER
OF REGISTRAR TO CORRECT THE REGISTER S15
LTA
The
courts have taken a narrow view of Registrar’s power to correct
register:
S15(1)-(8)
outlines when the registrar may correct the register
Registrar
can correct register if register incorrect & correction will not
prejudice rights of a holder of an interest.
Registrar
may correct register if register is incorrect by registrar’s
error or registrar has held an inquiry & has determined there is
an error including that there was fraud
May
correct even if prejudice of holder of rights if omitted easement or
Supreme Court order to correct under s 26
After
correction as if error never made
Under
1(b) rights of a holder not prejudiced if holder acquired or dealt
with interest with actual or constructive knowledge register was
incorrect & how
s19
LTA: Registrar has the power to hold an enquiry
to determine if the register should be corrected or if land was
fraudulently or wrongfully obtained.
Common
law defines wrongfully obtained s19(b)(i):
if it is obtained by an intentional act which is not rightful but
which may fall short of fraud within the meaning in the Torrens
Statute: Scallan v Registrar General
Ss20-22
LTA: Nature of the Hearings
Cases
on Prejudice: MBF v Fisher: New
lease issued without acknowledging lease, H: registrar
couldn’t amend as new owner would have been prejudiced
Equitiloan
Securities v Registrar of Titles: Registrar
was given correspondence alleging fraud on the registration of a
mortgage, R lodged a caveat & deleted mortgage. H: R acted
in excess of his power & was a nullity because the mortgagee
would have been prejudiced
SPECIFIC
EXCEPTIONS IN OTHER STATUTES
Land
Tax Act 1915: Unpaid taxes or rates are 1st charge
on the land where tax/rate is levied
Acquisition
of Land Act: Gives Crown/public authority power to
compulsorily acquire land.
Statutory
Right of User s180 PLA:
Compulsory easement
Foreign
Ownership of Land Register Act 1988: Prohibits or makes void
an interest in land unless certain prescribed conditions are met.
14
– COMPENSATION: ss188-190 LTA
Holder
of interest can be deprived of an interest in two ways:
Result
of a mistake/misfeasance of official of the titles office: MBF
v Fisher
Deprivation
of an estate or interest through the operation of indefeasibility
provisions of the LTA
POLICY
BEHIND COMPO: (a) Justice (often an innocent party
loses interest); (b) Public confidence (if deprived they will
be compensated; (c) Public interest (spreading risk); (d)
Business efficiency (avoids need for protective measures)
ENTITLEMENT
TO COMPENSATION:
Claimant
must be deprived of her or his land or an interest in the land or
suffer loss or damage
Can
extend to equitable interests: Williams
v Papworth
Can
be partial eg.subject to mortgage: Herron
v Broadbent
Can
be a total depravation of a legal interest: Keddell
v Regarose
The
deprivation must be caused by matter listed in s188(1) or s188A
S188(1):
(a) fraud; (b)
incorrect creation of indefeasible title; (c) incorrect
registration; (d) error in indefeasible title; (e)
tampering with register; (f) loss, destruction or improper use
of a document deposited or lodged at registry; (g) an
omission, mistake, breach of duty, negligence or misfeasance by
registrar; (h) exercise by registrar of a power in relation to
an application or dealing with which the person had no connection
S188A:
- similar, but relates to loss/damage rather than deprivation of
interest
The
circumstances must not be excluded by s188A(3), 188AA, 188 C, 188
D, 189 A or s189(1)
188A(3):
No compo if the registrar can correct
the register
188AA:
Cannot claim for personal injury; 188D:
Cannot subrogate insurers;
S189(1)(a):
because of breach of trust or fiduciary duty
*Note
s189(1)(b) : person or
person acting as agent or indemnified solicitor acting or
purporting to act for person substantially contributed to loss by
fraud, neglect etc (if agent, must be within authority)
Registrar
of Titles v Fairless: Mr Fairless
had been lead by fraud into a false sense of understanding; Cause of
loss was fraud of Doran not neglect by F
Neglect
by claimant needs to be more than a contributing factor
If
not the sole cause it needs to be considerable, big or large
contribution before entitlement to compensation lost
Consider
the claimant’s knowledge at the time
Common
sense test is applied to establish remoteness: March
v Stramere
PROCEDURE
FOR OBTAINING COMPO S188B:
1st
make a written submission to registrar outlining details of claim
(NB: if fraud report to Police 1st & they will hand
it over to Registrar).
If
Registrar doesn’t want to pay either Registrar or claimant can
apply to the SC for an order resolving the dispute: s188B.
SC will make order for compensation, cancel or correct an
indefeasible title: s188B(3)
TIME
LIMIT S188C:
Must claim within 12 yrs of becoming
aware of situation
MEASURE
OF COMPENSATION:
1.
Amount: Damages recoverable when land is
fraudulently subjected to a mortgage is ordinarily the lesser of the
amount secured by the mortgage & the value of the land. However
the higher amount may be recovered where that is reasonable between
the parties.
Keddell
v Regarose: Palmer
stole CT & reg’d two successive transfers to
company--->Mortgaged land for $534K when it was only worth $280K.
H: They were given $300K to buy the land back at the mortgagee
sale.
2.
Time: Each
case should be considered according to its own facts & the
overriding aim is to put the claimant back in the same position, so
far as money can do, as if the wrongful act had not been done: Reg
General v Behn. Courts are now
likely to calculate compensation at the date of judgement.
15
- TRUSTS
Torrens
system traditionally sought to avoid trusts on the register because
they add complexity. Trusts can be enforced through the in
personam exception.
A
trustee can be registered as a trustee by an instrument of transfer
(s109(a)) or through a request to vest
the interest in the person as trustee (s109(b)).
A trust deed can be lodged but won’t form part of the register
(s110(4))
16
– CAVEATS ss121 – 131 LTA
DEF:
‘a warning. An entry made in the books of the
offices of a registry or court to prevent a certain step being taken
without previous notice to the person entering the caveat.’
EFFECT
OF LODGING A CAVEAT:
s124(1):
A caveat prevents reg of another instrument affecting the
particular lot from the time & date of lodgement.
It
does not enlarge or add to the existing proprietary rights of the
caveator upon which the caveat is founded, but protects existing
rights: Butler v Faircloth
Warns
those dealing with the registered proprietor that an unregistered
estate or interest in the property is being claimed
It
alerts a person whose interest or whose right to registration of an
instrument is affected by the caveat that an unregistered estate or
interest in the property is being claimed (registrar must give
notice of C: s123)
Maintains
status quo by freezing register
Does
not prevent registration of s124(2):
(a)
Specified instrument; (b) Instrument consented to by
caveator; (c) Transfer by prior registered mortgage; (d)
Interest if registered will not affect caveator
WHO
CAN LODGE A CAVEAT?
S122(1)(a):
‘a person claiming an interest in the lot’
“Interest
“- Acts Interpretation Act s36
(a)
a legal or equitable estate in land or other property ; or
(b)
a right, power or privilege over, or in relation to the land or
other property
A
purely personal interest will not support a caveat: Re
P. T Earthmoving’s Caveat (earthmoving
co given access to land to build couldn’t caveat – may
be decided differently today on basis of s36, as a ‘right,
power, privilege’)
Parties
cannot create caveatable interest by an agreement that a caveat can
be lodged unless an interest in the land, such a charge, is created:
Despun Pty Ltd v Tahore Holdings
COMMON
TYPES OF CAVEATS in s122(1)(a): Person claiming interest
A
purchaser under a contract of sale
On
signing a contract of sale, purchaser has equitable title which will
support a caveat: Re Oil Tool Sales Pty Ltd
Conditional
contracts will also be supported eg subject to finance or on council
approval: Kuper v Keywest Contstructions.
[However courts previously took the view that they wouldn’t:
Re Bosca Land’s Caveat]
Equitable
mortgagee’s caveat
S122(2):
‘However, a caveat may only be lodged by an equitable mortgagee
if it is a caveat to which s126 applies’
i.e. if it is a lapsing caveat – means court proceedings must
be started within certain time.
To
protect interest of beneficiary under trust
CLEARING
A CAVEAT OFF THE TITLE:
1.
WITHDRAWAL OF CAVEAT (S125):
May be withdrawn by lodgement of request. S129:
After original caveat is lodged a further caveat with the same
caveator can never be lodged on the same or substantially the same
grounds unless court grants them leave to do so. I.e. you only get
one shot!
2.
LAPSE S126: Caveat
will lapse unless caveator:
Starts
proceedings in Court within 14 days after being given notice to do
so by a caveatee eg registered owner.
If
no notice has been served by caveatee, an action to establish the
interest must commence in a Court within 3 months of lodgement of
caveat
And
has notified the Registrar of commencement of the proceeding
Exceptions
to lapse s126(1): 1.Lodged
by the reg proprietor; 2. Lodged with consent of reg
proprietor; 3. Copy of court order providing basis of caveat
has been lodged s122(d) or (e); 4. Lodged by Registrar under
s17; 5. Is lodged other than under Division 2 ie instalment
contracts
3.
REMOVAL BY ORDER OF SC S127:
Caveatee must make application. Caveator must prove to the court:
1. The claim raises a serious matter to be tried; & 2.
The balance of convenience suggests the status quo should continue:
Re Jorss’ Caveat
4.
CANCELLATION BY REGISTRAR S128:
Caveat will be removed where: Caveator’s interest has
ceased; caveator’s claim has been abandoned, settled/satisfied;
caveator’s claim doesn’t prevent reg of instrument
DAMAGES
FOR IMPROPER CAVEAT: (S130)
s130(1):
Person lodging caveat without reasonable cause must compensate those
who suffer loss or damage as a result
“Reasonable
Cause” = foundation of a reasonable cause is not
actual existence of caveatable interest but honest belief based on
reasonable grounds that the caveator had such an interest: Bedford
Properties v Surgo
S130(2):
Court can award exemplary damages
130(3):
Onus is on the caveator to show that it was reasonable; rebuttable
presumption exists in compensation claims that caveat was
unreasonable
Farvet
v Frost: Claimant must prove: 1. Absence of
honest belief by caveator on reasonable grounds that caveatable
interest existed; 2. Caveat lodged & maintained for
improper purpose (eg. Pressure etc.). However, (1)
after this decision, 1997 amendment added 130(3)
to make it clear that onus was on caveator to show that
reasonable belief existed. Also, (2) arguable that there is
no need for ‘improper purpose’, as implied in section
heading.
17
– SETTLEMENT NOTICES: Part 7A
Provision
for lodgement of settlement notice in relation to purchase of
land, an interest capable of registration or instrument of mortgage
stating the documents that will be lodged: s138
LTA
s141:
prevents registration of interest while notice is in force other than
documents specified in the notice ie preserves lodger place in queue
for registration as instrument lodged after settlement notice but not
registered deemed lodged after documents denoted in settlement notice
e.g:
1. A enters contract to sell Blackacre to B; 2. A
enters contract to sell Blackacre to C; 3. C deposits
settlement notice; 4. B lodges a transfer; 5. C
lodges a transfer; 6. s150:
C’s transfer deemed lodged before
B’s transfer - if no caveat by B then C will be registered
first.
ADVANTAGES:
(a) inexpensive & quicker than caveat for purchases of
residential premises; (b) requirements less onerous than
caveats (don’t need to state grounds (s139)
LIMITS:
(a) Lapses in 2 months or when relevant documents lodged; (b)
Does not affect entitlement to caveat (s151);
(c) Cannot be made non lapsing; (d) cannot lodge another
without leave of court (s146); (e)
Potential liability for deposit without reasonable cause
(s147)
18
– COMPETING EQUITIES & IMPORTANCE OF CAVEATS
If
registration occurs then priority as discussed above under LTA
Prior
to registration interests are equitable – if there are 2 or
more interests the issue of priority between inconsistent interests
may arise ie two contracts to sell or two unregistered mortgages.
Which has priority?
If
there are several competing interests, should launch a caveat to
freeze the interests until the problem is solved.
BASIC
RULES:
Subsequent
equity has notice of prior equity, prior prevails: Platzer
v Cth Bank; Lapin v Abigail;
Moffet v Dillon
No
notice: Competing equitable interests prima facie take
priority in order in which they are created: Rice
v Rice, but only if the EQUITIES ARE EQUAL. Otherwise,
better equity will prevail:
In
order to determine the ‘better’ equity:
CONSIDER:
MERITS AND DEMERITS OF EACH EQUITY HOLDER
POSTPONING
/ DISENTITLING CONDUCT:
Enables
3rd party to go out into the world under false colours
(Breskvar v Wall). Incl:
Signing a blank transfer (Breskvar v
Wall); Giving the CT to others (Abigail
v Lapin); Notice of subsequent equity - equitable fraud
(Moffett v Dillon); Directly
misleading subsequent equity holder;
NOTE:
subs equity holder does not prevail simply b/c the prior equity is
unregisterable (Moffett v Dillon).
BUT:
lodgement of a caveat may neutralise the above disentitling conduct
Failure
to protect one’s own interests (negligence)
Failure
to lodge caveat: Mere failure ≠loss of priority for
prior equity holder but a weighty consideration (Heid
v RFC; Butler v Faircough; Abigail v Lapin; Clark v Raymor
– Qld case)
Failure
to lodge SN> same as caveat but worse: cheaper & easier;
2mnth
Failure
to Search the register
Prior:
failure to search irrelevant as first in line (a red herring)
If
sub failed but nothing was defined: not fundamental Butler
v Faircough
subsequent
equity holder has: (1) notice of prior equity (Platzer
v CBA); (2) failed to search the register - BAD
Positive
steps to protecting interest
possession
of CT; lodgement for registration before creation of subsequent
equity;, search the register (factor even if nothing to find)
(Osmanowski v Rose);
settlement/payment of money (Osmanowski v
Rose)
There
has been no case where a timely caveat has been lodged that the
equitable interest holder loses
Consequence
of Failure to Caveat
Loss
of priority if before registration i.e. equitable v equitable
Loss
of interest/indefeasibility if after registration
i.e. equitable v legal
Loss
of compensation if neglect which caused or substantially contributed
to the deprivation or loss or damage: RT v
Fairless
2 comments:
this really good, it is just the start I was looking for...do you have anything with regards to Crim procedure like PPRA, PSA, or what about constitutional law?
what about actually reading and do the work yourself
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