Property Exam Notes
LAWS 2204 - Property Ø (2). Implied periodic tenancy Fixture and Chattel (Belgrave) - ✓ Possession; ✓ Rent payment (1). What is the degree of physical attachment and the basis on it? - Term of lease: (2). Which presumption (based on degree of annexation) lies? à Agremeent between parties; or (3). Who bears the onus of proof of the objective intention test? à Term considered by the Court with regard to: (4). Objective intention test – relevant factors (not determinative) - Manner of rent calculaion - Nature of the chattel (attached by whom)? (e.g.: weekly/fortnightly/monthly rent?) - Relation and situation of the 2 parties? - Manner of rent payment - Permanent/substantial attachment / Temportary attacgement? (e.g.: Rent paid referrable to a year/an aliquot part) - Mode of annexation (Ease of removal)? (Any potential damage?) - Agreement on a fixed term of years = yearly - Purpose for which the chattel was fixed? (Display? Decoration?) - Subject intention (Any contract about ownership) - s127(1): If there is a year-to-year tenancy and no agreement (Belgrave – air-con)(Elitestone – wooden bungalow)(Leigh v is made as to its duration, such tenancy shall be deemed to be Taylor – Tapestries)(Elitestone – factors may be contradictory) a tenancy determinable at will of either of the parties by 1 month’s notice in writing expiring at anytime. Possession + Lost and Found - Possession = Physical control + Intention to possess (Parker) - Parties had agreed on a fixed term lease >1 year but had not - Doctrine of relativity – anyone with prior right à better claim fulfilled the requirmeents to enforce that obligation in law = - (1a). How the obejct is found – Object under/in the land à implied yearly lease (Moore v Dimond) occupants (even unaware) – superior right (Elwe). Problem-Solving Steps - (1b). How the object is found – Object on the land à General = finder. * Possession à land owner if he has a manifest intention to 1. Formal written lease? à Any deed? 2. Short-term lease? exercise the things upon the land. (South Staffordshire case - ring) à Term < 3 years? + Market rent? + Parole? - (2). Employee – who takes possession within (outside) scope of 3. Implied legal lease? employemnt à possession on employers (their own) behalf. à Possession? Rent payment? (Willey - sailor) (Byrne v Hoare - police) à Manner of rent calculation and rent payment? Transfer of interest = Implied yearly / momthly periodic tenancy? - Any deed? (s23B(1)) / Any registration under Torrens (s23B(3)) 4. Does s127(1) apply? - Vaild deed? (s38 – signed? Attesation? Delivered?) à NSW? + No agreement as to duration? + Year-to-year? - **Which stage of sale has reached? à different interest arisen!!! 5. If s127(1) applies, tenant can be evicted after 1 month’s (Express trust – there is declaration as trustee!) notice. - Exchange of contracts/Settlement à P.S.: If tenancy expires, no notice is required even if (Constructive Trust @ Bunny Industry – no declaration as trustee!) s127(1) applies. (Dockrill v Cavanagh) à (1). Valid contract? (O + A + C + I + No undue influence) 6. *Unregistered lease (Agreed lease) à equitable lease (** Family/Friends relationship – intention?) (Inwards) (Walsh v Lonsdale) (Leitz v Robinson) à (2). Specific performance? (Walsh v Lonsdale) - s54A(1) CN – in writing?; or - s54A(2) CN - part perfomance? (Mason v Clarke) ] Creation of lease – Substantive Requirements - Strict test: Maddison – the acts must be unequivocally Ø Substantive requirements: and of their own nature referable to some of the agrement. (1). Certainty of duration (✗ no other explanation for the act) (Ogilvie) - Rule: Both the commencmemt date and the maximum duration (Regent v Millet – agreeing to pay off mortgages/possession – test ✓) of the term must be rendered certain at the time the lease takes - Less strict test: Steadman – The acts on the balance of effect. probabilitites would indicate the contract of the kind - Examples of uncertain duration existed. (i.e.: There must be evidence of the contract.) à for the duration of the war. (Lace v Chantler) * In Aus, the strict test prevails but the court may also - If the maximum duration is specified and it is specified that the adopt the relaxed test. lease will end if an event occurs in the priod of time à there is à (3). Discretionary factors? (Oglivie v Ryan) certainty of duration. - P’s willingness to perform his obligation? - Tenanct at will à does not require certainty of duration - P in clean hand when he seeks equity? - Any delay? (Berrisford v Mexfield Housing Cooperative) - P rests on his rights? - P’s claim of equity essence? (2). Right to exclusive possession - Rule: A leasee has exclusive possession if they can Lease (Conveyancing Act 1919 (NSW)) exclude strangers and the landlord from the premises ] Leasehold estate = an estate in land with definite duration. and maintain an action of ejectment or trespass. ] Creation of legal lease – Formalities Requirement - Exclusive possession à lease (not license) Ø By deed – s23B(1): Deed – required to pass land interest - Test for license/lease = whether the parties intended Ø By short lease – s23D(2): the instrument to confer possession. (Radaich v Smith) - Parole lease - Terms < 3 years ] Breach of convenant (i.e.: Terms/Conditions of a lease) - Right to immediate possession Ø Terms implied at law in all leases: (may be varied – s74(2)) - Market rent without a fine (premium) - For tenant: Ø Lease based on possession – s23E(C) à To use the premises in a tenant-like manner (Must take proper care of the place (Warren v Keen)) ] Implied legal lease (arisen from possession) ñ - For landlord Ø (1). Implied tenancy at will (s23D(1)) à To grant quiet enjoyment of the property - ✓ Possession; ✗ Rent payment à Not to do something inconsistent with the intended use - Lease can be terminated at anytime (no need for prior notice) of the property. 1
LAWS 2204 - Property à Landlord is not responsible for nusiance caused by (Bona Fida Purchaser). random people. (Malzy v Eichhloz) - Once the title is transferred to a 3rd party, it becomes a à If landlord has taken remedial action but the nusiance question of priorities. remains, the landlord is not liable to other tenants’ actions. Ø Gibbs v Messer [1891] (Aussie Traveller v Markelea) - Fact: The solicitor transferred M’s land to a fictitutous person and executed a RM. Mortgages - Transaction involving a fictitious person = deriving title ] Equitable (Unregistered mortgage / Mortgage with no deeds) from a forged instrument = involve fraud = invalid. à can be made by deposit of title deeds if they were deposited with intent that the land which the deeds concerned shall be security for a payment of a debt (Theodore v Mistford)
Fraud
] Under s42 and 43, fraud is an express exception to indefeasibility. ] Requirment of fraud ] Equity of rectification (Lukacs v Wood)(Smith v Jones) – to Ø = personal dishonesty and moral turpitude (Butler) reflect the true nature of an agreement Ø = collusion in personal dishonesty & MT with a 3rd party. ] Right to recission (Efstratiou v Glantschnig) Ø Arises where there is an equitable fraud Ø = more than more mere disregard of other rights (Wicks) ] Estoppel (Inwards v Baker modified by Crabb) (Giumelli) Ø = fraud BY the party (Assets Co) before registration (B v N) Promissory estoppel – focus on the promise Ø = Wilful blindness = If the person had suspicions that there Proprietary estoppel – focus on someone exercising the might be fraud, and he didn't make inquiries so as to not legal rightsi in land. find out and thus tied down by law. (Assets Co) ] Elements of estoppel Ø Any past relationship between the rogue and bank (3rd party) 1. Expectation of interest in land? Ø Failure to discover the fraud of another because he didn't 2. Encouragement by the owner of the land? make inquiries ≠ fraud. (Asset Co) 3. Detriment to the person with the expectation? Ø Honestly belive the transaction is legitimate and free from (Detriment has to be related to the expectation) (Crabb) fraud ≠ fraud. (Assets Co) (Inwards: Baker spent time and $ to improve the house) Ø Nothing seems to suggest X was an active participant of F? Restrictive covenants (Wiles v Spooner) ] Cases ] An agrement restricting a landowner in the use/enjoyment of Ø Loke Yew v Port [1913] the landowner’s land for the benefit of other land/for the - Fact: LY acquired some land from E but did not register it. benefit of a public authority (or another person) E then sold the remaining land to P, who agreed (promised) Ø = an equitable interest that they are not buying LY’s land. After settlement, P registered all of the land, including LY’s land. Torrens System (Real Property Act 1900 (NSW)) - A party promising (ie: promise to protect) that an URI will be preserved in order to induce another party (landlord) to ] Interest of mortgagor = equity for rescission of fraud. agree on a transaction and then going back on that promise (Equity of redemption – HCA: Even if it does exist, upon the = Fraud. power of sale, it is suspended until the dispute is sorted out.) - Deliberate misrepresentation to the person – fruadlenet. ] Indefeasibility Ø Efstrtiou v Glantschig [1972] Ø S42: - Fact: Mr.G was the RP but he and Mrs. G both paid for Registration confers indefeasible title excep in cases of fraud. the house. They divorced. Mr. G instructed a property agent Ø S43: to sell the house to E. Mrs. G argued on fraud. - Except in the case of fraud, no person taking a trasfer from - The sale was completed in a great speed and the house the registered proprietor (RP) shall be affected by notice was sold far below market price. Having suspicion of a direct or constructive of any trust or unregistered interest. fraud but did not enquire = wilful blindness = fraud. - The knowledge that any such trust or unregistered interest Ø Wicks v Benett (1921) is in existence shall not of itself be imputed as fraud. - Fact: W had an URI in the land. B (RP) sold the land to D. Ø S45(2): D had spoken to W and knew that W had an interest in land. Proceedings do NOT lie agast a purchaser / mortgagee who - Mere knowledge (notice) of an URI ≠ fraud (s43 RPA) is bona fide for valuable consideration of land merely Ø RM Hosking v Barnes (1971) because the vendor / mortgagor: - Facts: The RP had a lease with B for 2 years with an - (a). might become the RP through fraud/error/a void option to renew. Before end of the lease, the land was sold instrument. to H, who acknowledged in contract the existence of the - (b). might have procured the registration of the relevant lease to B and B would remain in possession. B paid rent to transfer/mortgage to the purchaser/mortgagee through H. When B sought to renew the lease, H refused. fraud/error/a void instrument. - Mere acknowledgment of the URI ≠ fraud - (c). might derive his right to registration from a person who - Notice after registration is irrelevant became the RP through fraud/error/a void instrument. Ø S58: RP is protected reliving any duty to inquire into the Ø Frazer v Walker (1967) à indefeasible title exercise of power of sale. - Fact: Wife forging Husband’s signature and signed a mortgage with someone, who then sold the land to a 3rd party. è Loke Yew: A would not have sold the land if he knew - s45(2)(b) à immediate indefeasibility. the purchasee would not honour the promise. (inducement) Ø Breskvar v Wall (1971) à indefeasible title è Hosking: It’s not deception, but just commercial. - Fact: B borrowed money from P by giving him an excuted transfer form of land and the cert. of title (CT). The form left Ø Grgic v ANZ (1994) the blank of transferee empty, which is void because of - Facts: G’s son stole the CT from C and had someone to failing the requirmenet of a Queensland Act. B did not impersonate G at the bank to sign a mortgage. The bank default but P transferred the land to W, who then sold it to A manager explained the mortgage and witnessed the 2
Mere Equities
LAWS 2204 - Property signature of the impersonated guy, but did not obtain the Regulation 12 -16 Real Property Regulation 2014: identification of him. - Checking identification documents of mortgagor - G was still the RP à should prove fraud by the bank - Face to face interview - Mere negligence ≠ fraud è If s56C not met, RG may cancel the RM. (s56C(6)) - Witnessng a fraud document ≠ fraud (Russo v Bendigo) Short-term Leases (Unregistered Lease) - The fradulent conduct has to relate to the extinguishment ] S42(1)(d): Any tenancy not exceeding 3 years (including of the URI, not mere general dishonesty. options to renew if there is any) = exception to indefeasibility. Ø Bahr v Nicolay (No 2) (1988) Registrar’s power to correct - Facts: B sold his land to N with a contract clause to ] S12(1)(d): The Registrar-General (RG) can correct errors and repurchase it after 3 years. N became the RP and sold the omissions in the Registrar. land to T with the condition T acknowkedge the rights of B Ø It cannot make substantive changes (e.g.: error that the to repurchase the land. T knew about the URI of B, agreed transaction was nor recorded on the folio.) on it and became the RP. T send a letter to B acknowledging their right. When B wanted to repurchase, T Interests under other statutes (Inconsistent legislation) refused. ] A legislation applying to land inconsistent with the RPA - Majority: The fraud has to be committed in the act of Ø South-Eastern Drainage Board v Saving Bank of SA (1939) requiring a registered title. (Timing of fraud) - When there is inconsistency between legislation, the Court (i.e.: post-registration conduct doesn't count!!) applies ordinarily principle of statutory interpretation. - A contract of sale of land containing an acknowledgement Ø S42(3): This section prevails over any inconsistent of one’s interest = a promise to protect (refer to Loke Yew) provision of any other Act unless the inconsistent (B v N prevails over RM Hosking) provisions expressly provides that it is to have effect - Factor suggesting ones had been dishonest at the time he despite anything contained in this section. made the promise – quick speed to break the promose after à Amended in 2009 by RPAmendment Act (2009) No.17 sale (Loke Yew) Ø Since it’s not given whethter there is later amendment for Ø Cassegrain case the Act, both pre- and post-2009 have to be analysed!! - Facts: Claude was the director of CG. He lied to the Ø Pre-Amendment Act (2009) company that it owed him money. 2 acts have arisen: “Since the inconsistent Act is enacted before the Act 1: The company transferred a farm to Claude and Amendment Act (2009), s42(3) is firstly to be looked at. Felicity (Claude’s wife) S42(3) states that express words overriding Torrens Act 2: Claude transferred his 50% farm to Felicity, so legislation in the inconsistent Act is required for the Felicity became the 100% sole owner of the farm. inconsistency to be carried out.” CG wanted to challenge Felicity’s title. à [✓ express words] à the inconsistent Act prevails. - Fraud and Agency (C = F’s agent for fraud?) à [✗ express words] à s42(3) prevails and the Act is à Someone did something on behalf on someone else ≠ invalidated to the inconsistency. there is an agency relatioship. (Court à legal responsibility) Ø Post-Amendment Act (2009) à The fraud needs to be within the scope of agent authoity “Since the inconsistent Act is enacted after the Amendment to establish the fraud of the principal. Act (2009), the inconsistent Act is firstly to be looked at.” (Property agent = agent of vendor) - Level of interference? (e.g.: level of levy?) - Joint Tenancy - Any policy underlying the Act? (e.g.: property interest?) à Tenants are considered seprately. It has to be fraud by - Scope and objective of the Act? (Act Interpretation Act) the person. - Possibility of standing together? è Need more legislative material for further analysis. - s118(1)(d): à [Can stand together] à s42(3) would require the Proceedings for the possession/recovery of land do not lie inconsistent section not enacted. against the RP except: à [Still inconsistent] à the Act prevails over s42(3). (i). Proceedings brought by person deprived of land by Actions in personam fraud (P) against a person who has been registered as RP Ø A RP may be subject to in personam obligation arising in of the land through fraud (D) (Fraud by the new RP); law and equity.(Frazer) or Ø There can be action in personam if there is a known cause (ii). Proceedings brought by person deprived of land by of action. (Conlan v Register of Titles) fraud (P) against a person deriving (otherwise than as a transferee bona fide for valuable consideration) from or Ø Breach of Bahr v Nicolay trust through a person registered as RP of the land through - Repudiating a promise when not in need = unconscionable. fraud (i.e..: 3rd part getting the land from the rogue RP). - The acknowledgement is conisdered as an undertaking, è Anyone who takes as a RP other than a BFP for which is construed as a trust. valuable consideration does not get a immediately - Specific acknowledgeement is required (Vague not ok…) indefeasible title. - Bahr trust = written! (Oral representation may not be ok) s56C RPA (for mortgage only) (Reg 12-16 RPRegulation 2014) - In personam exception operates where the RP purchases Ø Russo v Bendigo Bank (1993) land having acknowledged that the existence of a prior URI - Facts: R’s son-in-law forged R’s signature and made a on the vendor and having expressly (or by implication) RM with the Bank. Despite the clear instruction from the agreed to take subject to his rights. solicitor, the solicitor clerk signed the attestation clause (can be pre/post registration) without herself being present at the actual signing. - Excusing factor – e.g.: financial need (for breaching the - R was still the RP à should prove fraud by the bank. trust!) - No personal dishonesty à false attestation ≠ fraud Ø Breach of a contract (*The contract must involve parties!*) - s56C: Reasonable steps requirement to confirm the Mercantile Mutual Life Insurance v Gosper (1991) identity of mortgagor 3
LAWS 2204 - Property - Facts: G’s husband forged her signature on a mortgage à Constructive notice: inspection of land and folio document for variation. The bank used the CT to complete (s164(1)(a)) the registration without G’s authorisation. à URI 2 should not just stop at accepting the vendor’s - A plaintiff can only bring an in personam claim if there is presentation. a known cause of action (e.g.: breach of contract) à ** For mortgage, notice = notice of the defective (P.S.: The Bank breached its obligation as the custodian of exercise of the power of sale. (Actual/Constuctive/In) the CT for G.) à Imputed notice: a person can be bound by the notice Ø Implied periodic tenancy received by their agents. (s164(1)(b)) - Possession and rent payment to the RP? à Wiles v Spooner: New purchaser obtaining the land from Ø Estoppel URI 2 who has no notice of URI 1 à protected. - Expectation, Encouragement and Detriment? à Meriton Apartments: N`otice after settlement but before registration does not bind purchaser, so as the caveat at that Interest listed on the folio time. ] Inconsistency of interest between the short-hand description of Ø IAC (Finance) v Courtenay (1963) CT (folio) and the interest stated under the contract. Fact: A sold a land to C with C siging a morthgage with A. Ø The indefeasible title is according to what the interest Before the transactions were registered, A retained the actually is under the contract/lease. (Mercantile v Shell) document. A and C later agreed that A would buy the land (Bursill Enterprises v Berger Brother Trading) back. Before the registration of the 2nd sale, A sold the land Volunteers to D with the documents being uplifted. D asked why the ] Are volunteers subject to the equities affected the transferor? documents were uplifted, and A lied. IAC was the Ø @ NSW mortgagee of D for the purchase. Before IAC registered the - Volunteers are treated the same as purchaser mortgage, C commenced an action. (i.e.: Volunteer gets the benefit of immediate indefeasibility - Taylor J: D was aware of C’s URI. à IAC failed. except under s118(1)(d) or fraud exception) Ø Even if s43A applies, still go talk about first in time rule!!! à V = BFP for valuable consideration à no proceedings ] Ordinary rule: First in time prevails unless equities are unequal (Bogdanovic v Koteff) (Farah Construction v Say-Dee) (Abagail v Lapin) Ø @ Victoria (1). Does URI 2 know of URI 1? (Moffet v Dilon – Actual kn) - Volunteers are subject to the equities affecting the transferor. à [Yes] à URI 1 wins (URI 2 knows equities arent equal) (i.e.: Whatever the transferor is subject to, so as the volunteer) à [No] à (2) (i.e.: The immediate indefeasibility will not protect volunteer) (2). Is there a causal connection between URI 1’s conduct and (King v Smail) (Rasmussen v Rasmussen) URI 2 acquiring interest in the mistaken belief there was no prior interest. à go to evaluation!!!! (Cth v Platzer – Unregistered Interest (URI) v URI other conduct of URI 1 may affect priority.) ] What does the client want? à [Yes] à (3) ] Identify the interest: à [No] à URI 1 wins - UR lease: Equitable lease (Trust) / Implied periodic lease (3). Excusing factor in fairness & justice for URI 1’s conduct? - UR mortgage à [Yes] à URI 1 wins (e.g.: standard conveyancing practice - Trust (e.g.: Bahr v Nicolay) – not to caveat / advice from lawyer?) - Right to recission (eq. fraud)/rectification (Frazer v Walker) à [No] à URI 2 wins - Estoppel - Unregistered fee simple (for purchaser) ] Evaluating URI 1’s conduct ] Establish the time order Ø Failure to caveat (before creation of URI 2) (Caveat – s74 RPA) ] S43A: A purchaser (URI 2) will acquire indefeasible title before - Did URI 1 caveat immediately on finding URI 2? registration if: (IAC Finance) (Butler – the mortgage was postponed because the caveat had (1). URI 2 is dealing with a RP of the property / mortgage. not been lodged before the purchaser had paid the purchase à [Application] money and received the transfer.) à [For successor of URI 2] - Failure to caveat in a timely fashion will not automnatically - A purchaser who is s43A-protected can pass the grant postponement. (J&H Just – 1st mortgagee failed to caveat protection on to a successor who would not be while holding the CT – interest was not postponed.) independently protected. (Jonray v Partridge Bros) - Loss of CT à should caveat (s74(2)) (Cant just replace it) (2). URI 2 has a registrable dealing. ** Should caveat when the mortgagor senses sth wrong with à [Formal requirements for registration met?] his interest!! (e.g.: getting notice of the mortgage)” - Use of the approved form? - Whether failure to caveat = postponing conduct depends on - No errors/gaps that cannot be corrected by the Registrar? circumstances of the case – can URI 2 have access to CT? - Is it a void instrument (e.g.: void due to forgery?) à if yes, should caveat earlier (P2P v Sharari) - URI 2 has access to CT and present it to the Registrar? It was prudent to caveat immediately after sale (in a timely (3). URI 2 has a legal estate/lease. fashion) (particualrly when URI 1 does not have CT) à At settlement, is URI 2 a bona fide purchaser for value (Osmanoski v Rose (1974)) without notice (BFPVWN)? (Taylor J in IAC Finance case) - Legal possession of land à no need to caveat (not central - Bona Fide: Good faith / General honesty? purpose of caveat) (J&H Trust) (Except mortgage – normal p) - Purchaser à s7(1) à acquire interest! - When should defaulted mortgagor caveat? – after the default / - Value: Any consideration? sensing an incorrect exercise of power of sale? (need not be adequate but must be valuable.) Ø Arming conduct (Failure to caveat timely may also = arming!) - Notice: - URI 1’s equity is not to be postponed to the URI 2 unless the à Actual notice – actual knowledge? Proof? act or omission proved against URI 1 has conduct or à Consturctive notice: A reasonably prudent purchaser is contributed to a mistaken belief of URI 2, at the time when he required to make inquirie as to all occupants even if their acquired it, that the URI 1 was not in existence. occupation is consistent with the title offered. (Abigail v Lapin) (Williams v Boland) 4
LAWS 2204 - Property à Landlord is not responsible for nusiance caused by (Bona Fida Purchaser). random people. (Malzy v Eichhloz) - Once the title is transferred to a 3rd party, it becomes a à If landlord has taken remedial action but the nusiance question of priorities. remains, the landlord is not liable to other tenants’ actions. Ø Gibbs v Messer [1891] (Aussie Traveller v Markelea) - Fact: The solicitor transferred M’s land to a fictitutous person and executed a RM. Mortgages - Transaction involving a fictitious person = deriving title ] Equitable (Unregistered mortgage / Mortgage with no deeds) from a forged instrument = involve fraud = invalid. à can be made by deposit of title deeds if they were deposited with intent that the land which the deeds concerned shall be security for a payment of a debt (Theodore v Mistford)
Fraud
] Under s42 and 43, fraud is an express exception to indefeasibility. ] Requirment of fraud ] Equity of rectification (Lukacs v Wood)(Smith v Jones) – to Ø = personal dishonesty and moral turpitude (Butler) reflect the true nature of an agreement Ø = collusion in personal dishonesty & MT with a 3rd party. ] Right to recission (Efstratiou v Glantschnig) Ø Arises where there is an equitable fraud Ø = more than more mere disregard of other rights (Wicks) ] Estoppel (Inwards v Baker modified by Crabb) (Giumelli) Ø = fraud BY the party (Assets Co) before registration (B v N) Promissory estoppel – focus on the promise Ø = Wilful blindness = If the person had suspicions that there Proprietary estoppel – focus on someone exercising the might be fraud, and he didn't make inquiries so as to not legal rightsi in land. find out and thus tied down by law. (Assets Co) ] Elements of estoppel Ø Any past relationship between the rogue and bank (3rd party) 1. Expectation of interest in land? Ø Failure to discover the fraud of another because he didn't 2. Encouragement by the owner of the land? make inquiries ≠ fraud. (Asset Co) 3. Detriment to the person with the expectation? Ø Honestly belive the transaction is legitimate and free from (Detriment has to be related to the expectation) (Crabb) fraud ≠ fraud. (Assets Co) (Inwards: Baker spent time and $ to improve the house) Ø Nothing seems to suggest X was an active participant of F? Restrictive covenants (Wiles v Spooner) ] Cases ] An agrement restricting a landowner in the use/enjoyment of Ø Loke Yew v Port [1913] the landowner’s land for the benefit of other land/for the - Fact: LY acquired some land from E but did not register it. benefit of a public authority (or another person) E then sold the remaining land to P, who agreed (promised) Ø = an equitable interest that they are not buying LY’s land. After settlement, P registered all of the land, including LY’s land. Torrens System (Real Property Act 1900 (NSW)) - A party promising (ie: promise to protect) that an URI will be preserved in order to induce another party (landlord) to ] Interest of mortgagor = equity for rescission of fraud. agree on a transaction and then going back on that promise (Equity of redemption – HCA: Even if it does exist, upon the = Fraud. power of sale, it is suspended until the dispute is sorted out.) - Deliberate misrepresentation to the person – fruadlenet. ] Indefeasibility Ø Efstrtiou v Glantschig [1972] Ø S42: - Fact: Mr.G was the RP but he and Mrs. G both paid for Registration confers indefeasible title excep in cases of fraud. the house. They divorced. Mr. G instructed a property agent Ø S43: to sell the house to E. Mrs. G argued on fraud. - Except in the case of fraud, no person taking a trasfer from - The sale was completed in a great speed and the house the registered proprietor (RP) shall be affected by notice was sold far below market price. Having suspicion of a direct or constructive of any trust or unregistered interest. fraud but did not enquire = wilful blindness = fraud. - The knowledge that any such trust or unregistered interest Ø Wicks v Benett (1921) is in existence shall not of itself be imputed as fraud. - Fact: W had an URI in the land. B (RP) sold the land to D. Ø S45(2): D had spoken to W and knew that W had an interest in land. Proceedings do NOT lie agast a purchaser / mortgagee who - Mere knowledge (notice) of an URI ≠ fraud (s43 RPA) is bona fide for valuable consideration of land merely Ø RM Hosking v Barnes (1971) because the vendor / mortgagor: - Facts: The RP had a lease with B for 2 years with an - (a). might become the RP through fraud/error/a void option to renew. Before end of the lease, the land was sold instrument. to H, who acknowledged in contract the existence of the - (b). might have procured the registration of the relevant lease to B and B would remain in possession. B paid rent to transfer/mortgage to the purchaser/mortgagee through H. When B sought to renew the lease, H refused. fraud/error/a void instrument. - Mere acknowledgment of the URI ≠ fraud - (c). might derive his right to registration from a person who - Notice after registration is irrelevant became the RP through fraud/error/a void instrument. Ø S58: RP is protected reliving any duty to inquire into the Ø Frazer v Walker (1967) à indefeasible title exercise of power of sale. - Fact: Wife forging Husband’s signature and signed a mortgage with someone, who then sold the land to a 3rd party. è Loke Yew: A would not have sold the land if he knew - s45(2)(b) à immediate indefeasibility. the purchasee would not honour the promise. (inducement) Ø Breskvar v Wall (1971) à indefeasible title è Hosking: It’s not deception, but just commercial. - Fact: B borrowed money from P by giving him an excuted transfer form of land and the cert. of title (CT). The form left Ø Grgic v ANZ (1994) the blank of transferee empty, which is void because of - Facts: G’s son stole the CT from C and had someone to failing the requirmenet of a Queensland Act. B did not impersonate G at the bank to sign a mortgage. The bank default but P transferred the land to W, who then sold it to A manager explained the mortgage and witnessed the 2
Mere Equities
LAWS 2204 - Property signature of the impersonated guy, but did not obtain the Regulation 12 -16 Real Property Regulation 2014: identification of him. - Checking identification documents of mortgagor - G was still the RP à should prove fraud by the bank - Face to face interview - Mere negligence ≠ fraud è If s56C not met, RG may cancel the RM. (s56C(6)) - Witnessng a fraud document ≠ fraud (Russo v Bendigo) Short-term Leases (Unregistered Lease) - The fradulent conduct has to relate to the extinguishment ] S42(1)(d): Any tenancy not exceeding 3 years (including of the URI, not mere general dishonesty. options to renew if there is any) = exception to indefeasibility. Ø Bahr v Nicolay (No 2) (1988) Registrar’s power to correct - Facts: B sold his land to N with a contract clause to ] S12(1)(d): The Registrar-General (RG) can correct errors and repurchase it after 3 years. N became the RP and sold the omissions in the Registrar. land to T with the condition T acknowkedge the rights of B Ø It cannot make substantive changes (e.g.: error that the to repurchase the land. T knew about the URI of B, agreed transaction was nor recorded on the folio.) on it and became the RP. T send a letter to B acknowledging their right. When B wanted to repurchase, T Interests under other statutes (Inconsistent legislation) refused. ] A legislation applying to land inconsistent with the RPA - Majority: The fraud has to be committed in the act of Ø South-Eastern Drainage Board v Saving Bank of SA (1939) requiring a registered title. (Timing of fraud) - When there is inconsistency between legislation, the Court (i.e.: post-registration conduct doesn't count!!) applies ordinarily principle of statutory interpretation. - A contract of sale of land containing an acknowledgement Ø S42(3): This section prevails over any inconsistent of one’s interest = a promise to protect (refer to Loke Yew) provision of any other Act unless the inconsistent (B v N prevails over RM Hosking) provisions expressly provides that it is to have effect - Factor suggesting ones had been dishonest at the time he despite anything contained in this section. made the promise – quick speed to break the promose after à Amended in 2009 by RPAmendment Act (2009) No.17 sale (Loke Yew) Ø Since it’s not given whethter there is later amendment for Ø Cassegrain case the Act, both pre- and post-2009 have to be analysed!! - Facts: Claude was the director of CG. He lied to the Ø Pre-Amendment Act (2009) company that it owed him money. 2 acts have arisen: “Since the inconsistent Act is enacted before the Act 1: The company transferred a farm to Claude and Amendment Act (2009), s42(3) is firstly to be looked at. Felicity (Claude’s wife) S42(3) states that express words overriding Torrens Act 2: Claude transferred his 50% farm to Felicity, so legislation in the inconsistent Act is required for the Felicity became the 100% sole owner of the farm. inconsistency to be carried out.” CG wanted to challenge Felicity’s title. à [✓ express words] à the inconsistent Act prevails. - Fraud and Agency (C = F’s agent for fraud?) à [✗ express words] à s42(3) prevails and the Act is à Someone did something on behalf on someone else ≠ invalidated to the inconsistency. there is an agency relatioship. (Court à legal responsibility) Ø Post-Amendment Act (2009) à The fraud needs to be within the scope of agent authoity “Since the inconsistent Act is enacted after the Amendment to establish the fraud of the principal. Act (2009), the inconsistent Act is firstly to be looked at.” (Property agent = agent of vendor) - Level of interference? (e.g.: level of levy?) - Joint Tenancy - Any policy underlying the Act? (e.g.: property interest?) à Tenants are considered seprately. It has to be fraud by - Scope and objective of the Act? (Act Interpretation Act) the person. - Possibility of standing together? è Need more legislative material for further analysis. - s118(1)(d): à [Can stand together] à s42(3) would require the Proceedings for the possession/recovery of land do not lie inconsistent section not enacted. against the RP except: à [Still inconsistent] à the Act prevails over s42(3). (i). Proceedings brought by person deprived of land by Actions in personam fraud (P) against a person who has been registered as RP Ø A RP may be subject to in personam obligation arising in of the land through fraud (D) (Fraud by the new RP); law and equity.(Frazer) or Ø There can be action in personam if there is a known cause (ii). Proceedings brought by person deprived of land by of action. (Conlan v Register of Titles) fraud (P) against a person deriving (otherwise than as a transferee bona fide for valuable consideration) from or Ø Breach of Bahr v Nicolay trust through a person registered as RP of the land through - Repudiating a promise when not in need = unconscionable. fraud (i.e..: 3rd part getting the land from the rogue RP). - The acknowledgement is conisdered as an undertaking, è Anyone who takes as a RP other than a BFP for which is construed as a trust. valuable consideration does not get a immediately - Specific acknowledgeement is required (Vague not ok…) indefeasible title. - Bahr trust = written! (Oral representation may not be ok) s56C RPA (for mortgage only) (Reg 12-16 RPRegulation 2014) - In personam exception operates where the RP purchases Ø Russo v Bendigo Bank (1993) land having acknowledged that the existence of a prior URI - Facts: R’s son-in-law forged R’s signature and made a on the vendor and having expressly (or by implication) RM with the Bank. Despite the clear instruction from the agreed to take subject to his rights. solicitor, the solicitor clerk signed the attestation clause (can be pre/post registration) without herself being present at the actual signing. - Excusing factor – e.g.: financial need (for breaching the - R was still the RP à should prove fraud by the bank. trust!) - No personal dishonesty à false attestation ≠ fraud Ø Breach of a contract (*The contract must involve parties!*) - s56C: Reasonable steps requirement to confirm the Mercantile Mutual Life Insurance v Gosper (1991) identity of mortgagor 3
LAWS 2204 - Property - Facts: G’s husband forged her signature on a mortgage à Constructive notice: inspection of land and folio document for variation. The bank used the CT to complete (s164(1)(a)) the registration without G’s authorisation. à URI 2 should not just stop at accepting the vendor’s - A plaintiff can only bring an in personam claim if there is presentation. a known cause of action (e.g.: breach of contract) à ** For mortgage, notice = notice of the defective (P.S.: The Bank breached its obligation as the custodian of exercise of the power of sale. (Actual/Constuctive/In) the CT for G.) à Imputed notice: a person can be bound by the notice Ø Implied periodic tenancy received by their agents. (s164(1)(b)) - Possession and rent payment to the RP? à Wiles v Spooner: New purchaser obtaining the land from Ø Estoppel URI 2 who has no notice of URI 1 à protected. - Expectation, Encouragement and Detriment? à Meriton Apartments: N`otice after settlement but before registration does not bind purchaser, so as the caveat at that Interest listed on the folio time. ] Inconsistency of interest between the short-hand description of Ø IAC (Finance) v Courtenay (1963) CT (folio) and the interest stated under the contract. Fact: A sold a land to C with C siging a morthgage with A. Ø The indefeasible title is according to what the interest Before the transactions were registered, A retained the actually is under the contract/lease. (Mercantile v Shell) document. A and C later agreed that A would buy the land (Bursill Enterprises v Berger Brother Trading) back. Before the registration of the 2nd sale, A sold the land Volunteers to D with the documents being uplifted. D asked why the ] Are volunteers subject to the equities affected the transferor? documents were uplifted, and A lied. IAC was the Ø @ NSW mortgagee of D for the purchase. Before IAC registered the - Volunteers are treated the same as purchaser mortgage, C commenced an action. (i.e.: Volunteer gets the benefit of immediate indefeasibility - Taylor J: D was aware of C’s URI. à IAC failed. except under s118(1)(d) or fraud exception) Ø Even if s43A applies, still go talk about first in time rule!!! à V = BFP for valuable consideration à no proceedings ] Ordinary rule: First in time prevails unless equities are unequal (Bogdanovic v Koteff) (Farah Construction v Say-Dee) (Abagail v Lapin) Ø @ Victoria (1). Does URI 2 know of URI 1? (Moffet v Dilon – Actual kn) - Volunteers are subject to the equities affecting the transferor. à [Yes] à URI 1 wins (URI 2 knows equities arent equal) (i.e.: Whatever the transferor is subject to, so as the volunteer) à [No] à (2) (i.e.: The immediate indefeasibility will not protect volunteer) (2). Is there a causal connection between URI 1’s conduct and (King v Smail) (Rasmussen v Rasmussen) URI 2 acquiring interest in the mistaken belief there was no prior interest. à go to evaluation!!!! (Cth v Platzer – Unregistered Interest (URI) v URI other conduct of URI 1 may affect priority.) ] What does the client want? à [Yes] à (3) ] Identify the interest: à [No] à URI 1 wins - UR lease: Equitable lease (Trust) / Implied periodic lease (3). Excusing factor in fairness & justice for URI 1’s conduct? - UR mortgage à [Yes] à URI 1 wins (e.g.: standard conveyancing practice - Trust (e.g.: Bahr v Nicolay) – not to caveat / advice from lawyer?) - Right to recission (eq. fraud)/rectification (Frazer v Walker) à [No] à URI 2 wins - Estoppel - Unregistered fee simple (for purchaser) ] Evaluating URI 1’s conduct ] Establish the time order Ø Failure to caveat (before creation of URI 2) (Caveat – s74 RPA) ] S43A: A purchaser (URI 2) will acquire indefeasible title before - Did URI 1 caveat immediately on finding URI 2? registration if: (IAC Finance) (Butler – the mortgage was postponed because the caveat had (1). URI 2 is dealing with a RP of the property / mortgage. not been lodged before the purchaser had paid the purchase à [Application] money and received the transfer.) à [For successor of URI 2] - Failure to caveat in a timely fashion will not automnatically - A purchaser who is s43A-protected can pass the grant postponement. (J&H Just – 1st mortgagee failed to caveat protection on to a successor who would not be while holding the CT – interest was not postponed.) independently protected. (Jonray v Partridge Bros) - Loss of CT à should caveat (s74(2)) (Cant just replace it) (2). URI 2 has a registrable dealing. ** Should caveat when the mortgagor senses sth wrong with à [Formal requirements for registration met?] his interest!! (e.g.: getting notice of the mortgage)” - Use of the approved form? - Whether failure to caveat = postponing conduct depends on - No errors/gaps that cannot be corrected by the Registrar? circumstances of the case – can URI 2 have access to CT? - Is it a void instrument (e.g.: void due to forgery?) à if yes, should caveat earlier (P2P v Sharari) - URI 2 has access to CT and present it to the Registrar? It was prudent to caveat immediately after sale (in a timely (3). URI 2 has a legal estate/lease. fashion) (particualrly when URI 1 does not have CT) à At settlement, is URI 2 a bona fide purchaser for value (Osmanoski v Rose (1974)) without notice (BFPVWN)? (Taylor J in IAC Finance case) - Legal possession of land à no need to caveat (not central - Bona Fide: Good faith / General honesty? purpose of caveat) (J&H Trust) (Except mortgage – normal p) - Purchaser à s7(1) à acquire interest! - When should defaulted mortgagor caveat? – after the default / - Value: Any consideration? sensing an incorrect exercise of power of sale? (need not be adequate but must be valuable.) Ø Arming conduct (Failure to caveat timely may also = arming!) - Notice: - URI 1’s equity is not to be postponed to the URI 2 unless the à Actual notice – actual knowledge? Proof? act or omission proved against URI 1 has conduct or à Consturctive notice: A reasonably prudent purchaser is contributed to a mistaken belief of URI 2, at the time when he required to make inquirie as to all occupants even if their acquired it, that the URI 1 was not in existence. occupation is consistent with the title offered. (Abigail v Lapin) (Williams v Boland) 4
