Property Law Tutes
Di Everett – tutor. Ph. 55951060. Secretary – Kerry.
Week Two – Tute One – 22.9.97
"Property" has a circular definition. It expands on the concept rather than defining it.
Elements of Property:
- Legal and Equitable (Legal interest – from common law, Equitable interest – from equity)
- Present/Future (Future property – from equity, Present property – common law)
- Vested/Contingent (Vested interest – guaranteed future interest, Contingent interest – conditional future interest)
- Estate or Interest (Ownership of land = estate, Land owner grants you use of land = interest)
- Choses in action/Choses in Possession (Action – debt, loan, etc., Possession – pen, book, TV)
Week Three – Tute Two – 29.9.97
1. - Real Property – incorporeal heridament (Easement: a right to pass through or visit or . . have my property pass over someone’s land)
- Chattels Personal – Choses in action (But the piece of paper itself is a chose in possession.)
- Choses in action. (Shares cannot be used by just anyone, they are a form of proof that a specific person has a share in a company.)
- Personal property – Chattels real – leasehold
- Choses personal – choses in possession
- Real property – Fixture (attached to land for better use of land. If disputed, capable of being a chattel)
- Chattels personal – choses in action
- Corporeal immovable – corporeal heridaments – real property (there is an estate in fee simple)
- Not property (until it has been put into physical form and copyright applies)
- Prima facie, attached, so fixtures
- Degree of annexation
- Intention of item – better use of land. So fixtures
- Prima Facie – attached, so fixture
- Degree of annexation – built in – great
- Intention – if built in, enjoyment of land, so fixture.
- PF – attached, so fixture
- Degree – minimal, a few screws
- Intention – enjoyment as a chattel. So Chattel. (Do these steps before looking at Hire Purchase Act.)
- Under Qld Hire Purchase Act, it remains a chattel unless the third party doesn’t know about it, then it is a fixture, and hire purchase company must sue seller for the value of the item lost.
- Prima Facie – chattel
- Degree of annexation – resting on its own weight.
- Intention – refurbished as a living area, virtually another room of the house. If this is a strong enough argument by itself, fixture. If not, chattel. (If fixture, the bank can’t ask for money for it – he already owns it. If chattel, you ask seller to please move it off your property.)
- Prima Facie – chattel
- Degree – minimal
- Intention – house built to a theme, so it could be argued that it was intended to increase the enjoyment of the house itself.
Week Four – Tute Three – 6.10.97
Under the doctrine of tenure, persons are not able to own the land itself, but rather an abstract "estate" in land. This estate is capable of being "broken up" and for multiple parties to have co-existing "interests" in the land. For example, while the original party may grant his son (in a will) an estate for life (life estate in possession), and remainder to his daughter in fee simple (fee simple estate in expectancy). These are examples of fragmentation of interests on the basis of time. There is also fragmentation between legal ownership (Common Law) and Beneficial ownership (equity).
- Such fragmentation also applies to personal property – eg – co-ownership, holding something in a trust.
- From Mabo – The High Court found that the feudal doctrine of tenure does apply in Australia. Its structure is too deeply ingrained in our law to be removed. However, Native Title was found to pre-date the Crown’s claim to land here.
- s20(1) Property Law Act: "Quit Rent" – peppercorn payments to Crown for land abolished.
- Estate – interest in land under the Doctrine of Tenure, not ownership of land itself. Estate = gives you a bundle of rights regarding the land.
- Estate of freehold – an interest of no pre-determined duration (fee simple estate, life estate, (fee tail - abolished))
- Estate less than freehold – an estate with a fixed duration or one capable of being fixed. (leaseholder).
- Exception – perpetual leases in NSW – Crown leases land out for undetermined periods.
- Estate in Fee simple, life estate (under s19 PLA) – (s.22 Property Law Act abolishes Fee Tail)
5. In Possession – Current right to possession/enjoyment of land
- In Expectancy – Future Right to possession/enjoyment of land
6. A. - Legal life estate vested in possession
- Legal life estate remainder vested in interest
- Legal life estate contingent remainder
- Therefore, Grantor has fee simple reversion.
- Legal life estate pour autrevis vested in possession
- Therefore, G has FS Reversion
- Legal life estate vested in possession
- Fee simple remainder vested in interest (Not enough info about Y. So s.29 sas if it doesn’t specify, grantor passes ALL interest.)
- Legal life estate vested in possession.
- Legal life estate contingent fee simple remainder.
Week 5 – Tute 4 – 21.10.97
Questions of ownership
- Acquisition of title:
- By deriving it
- By creating it
- By possession.
- Did Peter & Kathy have title to it?
- Title passes "at the time that the parties intended" (s20, Sale of Goods Act)
- OR title passes at the time when the contract is made.
- To determine when the parties intended, look at conduct of the parties, agreements.
- Run both arguments:
- 1. If title hasn’t passed (eg – there’s a provision that says title is passed upon DELIVERY) –
- Then it is New Age’s dresser. Kathy and Pete have paid for it. What is New Age’s position? They have breached their contract. So they would have to repair if possible or refund.
- New Age is liable for damages for breach of contract.
- 2. If title DID pass at time of contract,
- Then there is now a BAILMENT. New Age is a Bailee for Cathy and Pete’s dresser. New Age have breached their duties as bailees (to take reasonable care)
- Liable for damages for breach of contract of bailment.
- Derivative Title?
- If derivative title, they bought the general "thing" and everything in it.
- If they specified what they bought just as "the dresser," then they did not get derivative title.
- Another argument – in order for them to have possession of it, they must have control over it and intention to exclude others from it.
- The rules about control of an area of land apply to personal property as well. (Ownership of item found in an area – land owner’s right to it depends upon the degree of control over the area)
- So Peter and Kathy by these arguments probably have to rights to the brooch.
- When an employee finds in the course of his employment duties, employer gets rights to what’s found (Byrne v Hoare - Police case) Unless the item is found coincidentally to being on the job.
- The Pioneer Container
- Bailee & Sub-bailee, Bailor, transfer of possession.
- Owner of goods has got a contract of bailment with courier (he gave his items to couriers) –
- The courier had entered into a contract of Sub-Bailment with shipping Co.
- The ship carrying the goods sank.
- The Owner had his goods damaged. Who gets sued? Ship owner was responsible for sinking it. But he was a 3rd party to the SHIPPER
- The owner of the goods could sue the courier (bailee) for breach of contract bailment.
- The bailee can sue the shipping company for the breach of contract of sub-bailment
- In the contract for sub-bailment, there was a clause that said that the only court that could hear this case would be in Taiwan. In Taiwan, there were circumstances preventing this.
- The terms bound the owner, through the bailee, (because he consented to the bailee’s terms), but if he hadn’t agreed to the general terms it wouldn’t have bound him.
- In a normal bailment contract, there wouldn’t be such wide terms used in the head bailment. (This provision said "you can enter into a sub-bailment on any terms you wish")
Tute 5 – Wk 6 – 20.10.97
- Possession is the root to title to land. After 6 years for personal property or 12 years for land, if you are simply in possession without any other claim to it, title is transferred to you.
- Possession is good against all except those with a better title to it. (If you have ownership and someone else takes wrongful possession, you have the right to bring an action against them.)
- See flow chart diagram as amended in Prop Law notes.
Week 7 – Tute 6 – 27.10.97
- Defects in Old System conveyancing – (Term "Private Conveyancing" refers to this and the Deeds Registration System as well.)
- Land purchaser has to inspect all documents regarding the land, dating back to the Crown grant – ("Chain of Title") in order to satisfy himself nobody else has title.
- A prior legal interest, although undiscoverable, is enforceable against newer ones.
- If there is a fraudulent document passed to an unsuspecting buyer, the original title holder retains the interest in the land. (This party can, however, sue for fraud.)
- Defects in title can be almost impossible to detect.
- Interests acquired by means other than documentation are not reflected in chain of title. (Trusts etc.)
- Searches are expensive and time consuming.
- Boundaries of land are uncertain
- Documents are held by private individuals, increasing risk of fraud.
- Deeds Registration System
- Improvements on Old System
- Registration gave priority over all subsequent registered or unregistered instruments. Priority was based on date and time of registration.
- Provided secondary evidence of the documents by listing them in the register.
- Problems with Deeds Rego System
- Registration did not confer title.
- If there is a defect in the title, title is only passed WITH its defective terms. (So nothing is really passed)
- Old System Title
- Audrey has title
- Barbara forges transfer of fee simple to Chester
- Chester transfers to Darby
- Darby mortgages property to G Credit Union
- Nemo Dat. When a document conferring title is forged, subsequent interests in that property are invalid.
- Therefore, Chester, Darby and G Credit Union’s interest in this land cannot stand against Audrey’s claim.
- Audrey is still in possession of the land. They would have to bring action against her to remove her, which they can’t do, so as long as she stays in possession, she is not threatened.
- (If Audrey wasn’t in possession, say Darby was, then she’d look to adverse possession as a cause to sue.)
- With regard to remedies available to the other parties, G may sue D for breach of the covenant that D had good title. D may sue C for the same thing.
Week 8 – Tute 7 – 4.11.97
Features of Whelan’s ‘Torrens System’
- The actual physical unit of land is the basis of the System.
- The existence of a register being run by the Government. On the register, all documents can be recorded.
- Subject to exceptions, once a person becomes a registered owner, nobody else has a claim to that registered land;
– LTA s184 – Except if the registered proprietor has been fraudulent
– LTA s 185 – If the registered proprietor has done something that gives rise to inequity, he is liable in an action in equity.
– Torrens System does away with Nemo Dat Rule, because title passes by registration and not by an act of the parties.
- Guarantee by the State for compensation. Such compensation is available for:
- Accidents by administrators of the Title Register
- Defraud by 3rd person.
Audrey’s property went to C by forged transfer of B.
- C becomes the registered proprietor in fee simple.
- At this stage, Audrey can sue Barbara for damages in deceit.
- Under s.183, C takes the land, except where C has been fraudulent.
- C has not been fraudulent – B has. So C retains the title. (LTAs. 184)
- But C did not make inquiry into the occupants on the property (Audrey)
- IS THIS FRAUD? NO. Just carelessness
- BUT – his behaviour may give rise to an action in equity against him – in estoppel for example.
- Action against Chester in Equity, possibly.
The land was transferred to D. D is now the registered proprietor. D mortgages property to G.
- Audrey cannot get it back from D. D has not been fraudulent. Somewhat less liable in Equity than C because D actually dealt with the registered proprietor.
- So action against D would not be likely.
Advise Audrey to sue as above, if that fails, then turn to compensation. The government has a compensation scheme.
Week 9 – Tute 8 – 10.11.97
- Morticia – registered proprietor in fee simple.
- has granted an easement to John. He has an unregistered equitable interest.
- Transfers title to James. He becomes reg prop in fee simple.
Advise John whether he has a claim against James in fraud.
- Fraud is an exception to indefeasibility only where the current registered proprietor or agent perpetrated it.
- Land Title Act s.184 (1) – Reg Prop holds interest free of other interests except registered interests.
- LTA s184(2) – Reg prop not affected by notice of unregistered interest.
- LTA s184(3) – Subsections 1&2 do not apply where there has been fraud by registered proprietor.
Torrens Title definition of fraud:
- Latec Investments v Hotel Terrigal per Kitto J – "Moral Turpitude"
- Waimiha Sawmilling v Waione Timber – "If the designed object of a transfer be to cheat a person of a known existing right, that is fraudulent."
- Bahr v Nicholay - "It is clear that to acquire land with notice of an unregistered interest such as a lease, to become the registered proprietor, and then to refuse to acknowledge the existence of the interest is not of itself fraud."
According to these precedents, James Dibble has not been fraudulent by merely having knowledge of the unregistered interest. Knowledge is not enough for there to be fraud. Actual notice must be given of the easement, on the contract for example.
Therefore, John has no action in fraud against James.
However, had James allowed the use of the easement to continue for some time after he had become registered, John may have had an action against him in equity.
Apply Lapin’s Case here.
- The Lapins had a "first in time" interest
- The Abigails had a "second in time" interest
- Situation was caused by Heavener’s fraudulent behaviour.
- The Lapins got the fee simple title back, subject to the Abigail’s mortgage.
- The Lapin’s carelessness allowed the fraudulent behaviour of Heavener to occur (by giving him a transfer as opposed to a mortgage) Postponement(?)
In this case, has Amanda behaved in such a way as to allow a postponement?
- No certificate of title was seen by her
- No enquiries were made by her
- No caveat registered by her.
When there are two unregistered equitable interests competing, conduct less than fraud will justify postponement.
Is her conduct sufficient to justify postponement?
- Failure to register a caveat AND
- Not having inquired as to the status of the certificate of title.
Here, we have both these elements, so Amanda’s interest will be postponed. Eastpac acquires first priority over Amanda.
LTA s179 – Registration is conclusive evidence of the contents of the instrument. (Something must be registered to be protected. Registration itself is the proof of the terms of the transaction.)
In Bursill, there was both an easement for the lower airspace and a transfer of title in fee simple for the upper airspace.
Bursill contradicts the Curtain Principle. This case says that you have to look behind the registration. Bursill says it is enough that the terms are laid out on the Certificate of Title to be honored. That is contradictory to LTA s179 which say that they must be registered to be honored.
Bursill is the accepted Australian authority on this. The rule in Bursill is the Australian position.
Tute 9 – Wk 10 – 17.11.97
GH – reg fee simple owner
- contracts to sell/transfer title to Adam
- (Adam has an equitable interest to title.)
- advises Sol, his lawyer
Sol – fraudulent behaviour
- obtains signature on blank transfer, states it is for the transfer to A
- nominates Big Bucks (his own company) as the transferee.
- Mortgages to EZ Home Loans for a fraudulent value of 2 million dollars.
- Secures loan on mortgage from EZ for 1.5 million dollars.
- Sol was acting as an agent for Big Bucks. Therefore, must consider this in terms of Big Bucks’ liability.
- BB has become the registered proprietor in fee simple. Indefeasible title, but subject to exceptions:
- BB’s agent’s behaviour was fraudulent. Sol was the agent of the company – he was the principal shareholder and director. (Fraudulent – LTAs184(3)(b) – Laytec Case, Loc Yew Case, Herron Case, "Moral Turpitude" "Intent to cheat")
- Therefore, BB’s title becomes defeasible against GH’s interest.
EZ Home Loans:
- Bona fide purchasers / mortgagee’s interests are indefeasible even if they’ve registered a void or voidable interest (as long as they haven’t been fraudulent themselves – LTA s184(1)) – victim loses the right to recover possession. Must seek damages from Security Fund.
- (From Herron v Broadbent) So: EZ Home become registered proprietors of mortgage.
- Can EZ claim compensation?
- S.188 – Policy is not intended to protect them, as they negligently accepted fake valuation.
- GH can recover title, subject to EZ Home Loans’ interest.
- S.188 does not say to what extent he will be compensated
- HOWEVER, LTA s.189(1)(b) says that if the fraud is perpetrated by your own agent (your solicitor, for example), you can’t claim compensation under Stat Comp Schemes. Must try for compensation under Insurance Indemnity Fund.
Adam’s claim against GH:
- Adam has a personal equity. He can claim either for specific performance or damages.
Tute 10 – Wk 11 – 24.11.97
Q1. – Main Issue: Is this an exception to indefeasibility?
This was a legal easement, as it was registered. Continues to bind servient tenant, even when registered incorrectly.
- Identify - LTA s.185(3)(b) – easement omitted thru error of Registrar
- - Registrar’s refusal to correct - LTA s.15 – Power of Registrar – Registrar MAY correct any registry (discretionary power). Registrar has to be satisfied that registered holder will not be subject to prejudice.
- BUT under LTA s.187(1) – can get court order from Supreme Court to force him to correct it.
- Owner of lot 3 – his indefeasibility is subject to the easement, even though not registered as far as he knew. (exception to indefeasibility)
- James v Registrar General – case about an omitted easement.
- Compensation - LTA s188(1)(g) – Compensable deprivation – loss of interest in a lot thru the omission/mistake of the registrar.
LTA s188(2) - Claimant eligible for compensation from the State. If compensation is insufficient, complainant may take action against the State for suitable compensation.
Q2. Note on exam technique – always start answer with:
1. Indefeasible interest? 2. Exceptions to indefeasibility.
- Beville takes indefeasibility under s. 184, not subject to Con’s unregistered interests.
BUT - EXCEPTIONS:
- LTA s.185(1)(b) – Unregistered short term lease is an exception to indefeasibility
- However, LTA s. 185(2) - Short term leasee has no right to extend term of unregistered lease. Therefore, Owner not bound by Con’s option to extend lease. (Short lease defined LTA s.4 – "less than 3 years")
- Personal equity arises out of Beville’s conduct (as there was a reference to the lease in the old contract which Beville saw. From Bahr v Nickolai.)
- Fraud – "I’ll look after you" – LTA s. 184(3)(b), LTA s.187 – Supreme court may make any order it deems just if it finds fraud.
Tute 11 – Wk 12 – 2.12.97
- LTA s.122 – What circumstances a caveat may be lodged in. (It is lodged over the counter – they don’t look at the circumstances in detail.)
- He had no interest in the land.
- Must see definition of "interest" in Acts Interpretation Act.
- Therefore he cannot legitimately lodge a caveat. The caveat was wrongfully placed and will be removed under LTA s.127(2). (It may also have been cancelled under s.128 by Registrar.)
- LTA s.130 - Compensation must be paid if caveat was lodged by the caveator without due cause.
- Bosca Land’s Caveat (Qld view) – A conditional contract does not give you an equitable interest sufficient to lodge a caveat.
- (Other Jurisdictions – Kouper’s Caveat – Conditional contract does give you an equitable interest sufficient to lodge a caveat.)
- So, according to Qld law in Bosca, conditional contract did not give him an equitable interest. Cannot lodge caveat.
- Remove Caveat.
- What interest does B have? (He can only register if he has an interest)
- He is first in time
- His interest is not a legal one, it is based upon M’s fraud. As a result, he is entitled to get his interest back. BUT (see Breskvar v Wall) – stupidity of handing over a blank transfer invalidates his priority.
- P has an equitable interest in the land as purchaser under the Contract. (he is second in time.)
- He is the registered proprietor – caveat can only stop something not yet registered.
- So, despite being second in time, P should have a priority in interest over B’s interest.
- You can only lodge a caveat if you have an interest in the land. Same argument as question 1.
Martha entitled to recover title from Slush Fund. Slush Fund’s title not indefeasible because of fraud. Eastpac has indefeasible interest in the mortgage.
- LTA s.188 – Compensation for deprivation
- LTA s.188(1)(a) – Deprived by fraud
- BUT LTA s.189(1)(b) – limits compensation if person who was fraudulent was your agent – have to argue whether or not real estate agent was Martha’s agent. If he was her agent, no compensation.
- If not her agent, then she will get compensation as follows –
- There’s a general principle that compensation would be for the value as at the time of the fraud.
- But here, she would be able to claim the amount that would secure the property free of the mortgage. So she would get $400, 000 and the Compensation Fund would sue Slush Fund.