Exam Prep for Topics Themselves â
Exam Prep for Topics Themselves Topic 1 – Caveats Purpose = protect the interest of the caveator Effect = freezing the register and giving notice of the outstanding respect to anyone who searches the register Who can caveat = s122(1)(x respective) LTA a) A person claiming an interest in the lot b) The Registrar - usually caveats during investigations into property disputes or when caveator cannot lodge themselves c) Registered owner – important when fraudulent dealings with the land d) A person whom the court has ordered an interest in the lot be transferred Caveatable interests = Registered owner (s122(1)(c) LTA) An equitable interest or share in property (s122(1)(a) LTA) o e.g. beneficiary under a trust o purchaser under unconditional K o Purchasers under conditional K’s MAY have caveatable interest if they would have a right to other equitable relief (injunction, SP) to restrain inconsistent dealings (Palm Gardens v PG Properties) Q to ask: would the purchaser have a right to an injunction to restrain vendor from dealing inconsistently? If yes – caveatable interest. If no – no caveatable interest o covenantee of benefited land – MAY caveat their interest with consent of covenantor as RO of land An agreement to grant an easement (Wellington City Corp v Public Trustee) ‘omitted easements’ (s122(1)(a) LTA) Mortgagee’s interest (Re Dixon’s Caveat) Profit-a-pendre holder (Connolly v Noone) ‘Mere equity’ holders where the right is to be re-instated as RO (Mijo Investments) – but other ‘mere equities’ are not caveatable (right to have K set aside – Global Minerals) Caveatable interests are ONLY THOSE STATED IN THE CAVEAT – any extending or directly related interests are not protected (Leros v Terara pg 21) A builders right to possession during a construction is NOT a caveatable interest (Re PT Stevens Earthmoving) o NB charge over land given to secure payment of building is an interest in land – caveatable How Caveats End = Caveats lodges by the RO or Registrar do not lapse – they may only be withdrawn or cancelled by registrar Withdrawn: by caveator (s125) Improper caveats should be withdrawn by the caveator before any damage to 3 rd parties occurs (if damage – liable to pay compensation) Lapse: caveats lodge 3 months after their lodgement if caveator fails to start proceedings (s126(4)(ii) LTA) If Caveat lodged, party needs SC leave to lodge 2 nd caveat on same grounds (s129 LTA) – SC will consider (i) serious question, (ii) balance of convenience AND (iii) satisfactory explanation for lapsing, (iv) prejudice on caveatee for lodgement of 2 nd caveat and (v) any delay (as per Landlush v Ruherford) Court must determine whether 2nd caveat is ‘appropriate in all the circumstances’ (OverseaChinese Banking Corp v Becker) 2nd caveat will usually be granted where the applicants interest in land is CLEARLY established and will be ADVERSLEY AFFECTED by the lack of caveat Early lapsing: caveatee may seek an order for caveator to begin proceedings within 14 days (s126(2) – (6)) – failure to do so = lapse Cancelled: if caveators claim has been abandoned, settled or satisfied, Registrar will cancel (s128) Supreme Court Order: may order the removal upon application (s127) – if application is brought, caveator must prove the need to retain the caveat by showing 1. There is a serious issue to be tried as to the caveator’s interest (demonstrate a ‘sufficient likelihood of success’), and “Sufficient likelihood of success” – from ABC v O’Neil, approved in Cousins Securities v CEC Group [2007]
Mercantile Credit Ltd v Shell Co (1976) 136 CLR 326
Relevant to: R lease – unR option to renew Competing interest – mortgage and unR option to renew Re Eastdoro Pty Ltd (No 2) [1990] 1 Qd R 424
Relevant to: Option to renew
Shell was a lessee of the property – he had a registered lease with an unregistered option. After registration, the lessor executed a mortgage with Mercantile and subsequently defaulted. Mercantile tried to exercise their power of sale but Shell sought a court order that their mortgage was subject to Shell’s lease “The covenant to renew touches and runs with the estate/interest. It is so intimately connected with the lease interest that it should be regarded as part of the estate”
The option to renew attracts indefeasibility by virtue of the registration of the initial lease
The option to renew a lease is a right to call for a fresh lease with fresh covenants. Where a new lease is not in fact executed after the proper exercise of an option to renew, then the parties are regarded as having an enforceable agreement for lease between them. The trial judge gave undue weight to the fact that a renewed term constitutes a fresh new lease. While this is true, the critical fact was that the exercise of the option took place pursuant to the right conferred by the original lease instrument which was registered. That registration gave statutory protection and appropriate priority of the interests conferred by the instrument. A right to renew contained in the registered instrument created, at the time of registration, a present interest in land within the scope of legislation and such right forms part of the interest to which registration gives priority (Mercantile). The court in Mercantile confirms that the options in a registered lease are protected against a subsequently registered mortgagee. The option to renew was protected by registration and lease interest took priority
Re Malsons Pty Ltd [1991] 2 Qd R6
Malsons was the lessee in a retail shopping centre for a pharmacy business. Malsons had taken an assignment of the lease from the original lessee. The lease provided for a demolition clause with 6 months’ notice and provided that the lessee would not be entitled to any compensation in these circumstances. Landlord gave notice under the demolition clause. M sought compensation for ‘injury suffered by the tenant by vacating the premise early’ as provided for in relevant statute Landlord argued M wasn’t entitled to compensation because the legislation was not in force at the time the original lease was entered into. M argued that the assignment of the lease created a new lease and therefore, as the assignment occurred after the introduction of the statute, the statute was implied into the lease Court held: Although the original lease was granted prior to the legislation, M’s assigned lease created a ‘new lease’ for the purposes of statute, and thus the compensation provisions could be applied Re Eastdoro relied on.
Mercantile Credit Ltd v Shell Co (1976) 136 CLR 326
Relevant to: R lease – unR option to renew Competing interest – mortgage and unR option to renew Re Eastdoro Pty Ltd (No 2) [1990] 1 Qd R 424
Relevant to: Option to renew
Shell was a lessee of the property – he had a registered lease with an unregistered option. After registration, the lessor executed a mortgage with Mercantile and subsequently defaulted. Mercantile tried to exercise their power of sale but Shell sought a court order that their mortgage was subject to Shell’s lease “The covenant to renew touches and runs with the estate/interest. It is so intimately connected with the lease interest that it should be regarded as part of the estate”
The option to renew attracts indefeasibility by virtue of the registration of the initial lease
The option to renew a lease is a right to call for a fresh lease with fresh covenants. Where a new lease is not in fact executed after the proper exercise of an option to renew, then the parties are regarded as having an enforceable agreement for lease between them. The trial judge gave undue weight to the fact that a renewed term constitutes a fresh new lease. While this is true, the critical fact was that the exercise of the option took place pursuant to the right conferred by the original lease instrument which was registered. That registration gave statutory protection and appropriate priority of the interests conferred by the instrument. A right to renew contained in the registered instrument created, at the time of registration, a present interest in land within the scope of legislation and such right forms part of the interest to which registration gives priority (Mercantile). The court in Mercantile confirms that the options in a registered lease are protected against a subsequently registered mortgagee. The option to renew was protected by registration and lease interest took priority
Re Malsons Pty Ltd [1991] 2 Qd R6
Malsons was the lessee in a retail shopping centre for a pharmacy business. Malsons had taken an assignment of the lease from the original lessee. The lease provided for a demolition clause with 6 months’ notice and provided that the lessee would not be entitled to any compensation in these circumstances. Landlord gave notice under the demolition clause. M sought compensation for ‘injury suffered by the tenant by vacating the premise early’ as provided for in relevant statute Landlord argued M wasn’t entitled to compensation because the legislation was not in force at the time the original lease was entered into. M argued that the assignment of the lease created a new lease and therefore, as the assignment occurred after the introduction of the statute, the statute was implied into the lease Court held: Although the original lease was granted prior to the legislation, M’s assigned lease created a ‘new lease’ for the purposes of statute, and thus the compensation provisions could be applied Re Eastdoro relied on.
