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Introductory Definitions

Property:
Description of legal relations with a thing (Yanner v Eton)
Property Interest:
Person holding the interest has a right to exclude others from using the thing
Characteristics of Property:
- Right to exclude others: not necessarily total exclusion;
- Right to alienate: the right to sell/give away;
- Right to use or enjoy: can be broken down to more specific rights.
Estate:
An interest in land which confers a right to possession of the land, either at once or at some
time tin the future, and is one of a defined duration.
Land:
Estate or interest in land (s.4 Transfer of Land Act 1958 (VIC))
Proprietor:
Any person entitled to an estate or an interest in land (s.4 Transfer of Land Act 1958 (VIC))
Registered proprietor:
Person listed on the Torrens register as being a proprietor (s.4 Transfer of Land Act 1958
(VIC))

Doctrine of Estates
Estate:
An interest in land which confers a right to possession of the land, either at once or at some
time in the future, and is one of a defined duration.
2 Categories of Estates:
- Freehold: A estate of uncertain duration;
- Duration does not have to be specific. Ie can be life.
- Leasehold: Estate of certain maximum duration
eg. 10 years duration or until 01 June 2012 etc.
3 types of Freehold estates:
- fee simple;
- fee tail;
- life estate.
Fee simple:
An estate of unlimited duration.
- even if the holder dies, the estate goes on;
- is alienable: estate can be moved (ie sold, given, willed etc) to another ;
- if no will or next of kin, estate passes to the crown;
- as good as absolute power/ownership (see Wik)
Fee tail:
as per fee simple, but with limits on right to alienation
- not important to us
Life estate:
lasts for the duration of a specified persons lifetime
- can be defined by reference to the lifetime of a person other than the holder (estate
pur autre vie).
- can be alienated (ie sold etc) but estate still comes to an end upon the death of the
person to whom the estate relates.
e.g. grant to father for his life. He can sell it, but buyer would only have
estate until father dies.
- when the defining life for a life estate ends, future interest is invoked
Future interest:
exists where a person has a right to an estate at the conclusion of a life estate
- the interest exists now, but is deferred until the life estate ends.
2 types of future interests:
- remainders: estate goes to a 3rd party after life estate ends (remainder is
passed on)
- reversions: estate is returned to the grantor of the life estate (reverts back to
grantor)
Remainders can be:
- vested; or
- contingent.
Vested:
A remainder which it bound to take effect
- person with remainder is precisely identified
- there is no condition attached: when the life estate ends, party with vested
interest takes over

Contingent:
a remainder which may or may not happen
- areas are uncertain
eg. precise identity of who remainder is going to, date etc
- statute allows contingent remainders to be alienated, even though it may
not be enacted
For example:
Z, the fee simple owner of Greenacre, grants Greenacre to D for life then to
F if F attains the age of 21. At the time of the grant F is 19 years old.
nb\ if contingent remainder is not enacted, transaction is void, with no refund
for the buyer.
Doctrine of Waste:
stops people with a life estate from detrimentally acting over the land, with regards to the
value of the land for the fee simple remainder
2 varieties of Waste:
- as a result of a positive act:
- voluntary waste
- equitable waste
- as a result of inaction:
- permissive waste
- ameliorating waste
Voluntary Waste:
a positive act causing injury to land
eg. destroying buildings; chopping down trees etc.
- life tenant is liable to damages to holder of future interest unless grant makes
him unimpeachable for waste (s132A PLA)
Equitable Waste:
intentional and serious injury to land
eg. a higher level of destruction, ie irrational use of land.
- Life tenant is liable unless the grant makes him unimpeachable for the
specific equitable waste (s133 PLA)
Permissive Waste
inaction leading to damage
eg. letting buildings become run down etc.
- life tenant is not liable unless grant imposes an obligation to do something.
Ameliorating Waste:
alteration to land which increases lands value
eg. future interest has a problem with development, even though it increases
value; a greeny is upset at a shopping centre being put up even though it increases
value.
- Is doubtful that future tenant has any remedy.

Transfer of Property Interests


2 Types of Transfer
- Inter Vivos (during life); and
- Testamentary Disposition (after death).
Inter Vivos (during life):
Includes: sale, gift etc.
Gifts:
Requires:
- Capacity
- Intention
- Formalities of transfer
nb\ See below for when a gift is complete in equity.
Capacity:
For gift to stand, title owner must have capacity to gift property
- capacity is assumed to exist, unless facts prove otherwise.
- Grounds for losing capacity include being a minor or of unsound mind etc.
Intention:
for gift to be legal, alleged donor must have had intention to make gift.
TEST:
- at time of alleged gift
- alleged donor must have intended to give a benefit to the donee ;
- and in doing so must divest some or all;
- of their own interest.
Nb: - Assess on words and actions of the donor at the time of the gift.
- Burden of proof falls on person alleging the gift.
Formalities of transfer:
STEP 1:
Note the following as an introduction:
- all conveyances of land or any interest therein must be by deed. s52(1)
Property Law Act 1958 (VIC), unless specified in s52(2)PLA:
(a) assents by a personal representative ;
(b) disclaimers made in accordance with the provisions of any law relating
to bankruptcy or insolvency or not required to be evidenced in writing;
(c) surrenders by operation of law, including surrenders which may, by
law, be effected without writing; ie delivery
(d) leases or tenancies or other assurances not required by law to be made
in writing;
(e) receipts not required by law to be under seal;
(f) vesting orders of the Court or other competent authority;
(g) conveyances taking effect by operation of law.
- It is only at registration that property interests pass from one party to another
as per s.40(1) TLA.
- Registration satisfies s52(2) PLA and can be substituted for a deed
NOTE THAT A GIFT THEREFORE REQUIRES A DEED OR DELIVERY
STEP 2:
Assess for:
- a deed of transfer; or
- delivery (under exception outlined in s52(2)(c) PLA)

Deed:
Must be:
- signed (s.73 PLA)
- Sealed: is sealed if describes itself as sealed (s73A PLA)
- Delivered: Refers to act which demonstrates intention of person executing the
deed to be bound by it. Usually (but not necessarily) demonstrated by
handing document to grantee of the interest.
Delivery:
means change in possession, and can include:
- handing over goods
- alleged donee already having goods (see Re Stoneham)
- alleged donee being granted licence to access goods, as per Wrightson v
McArthur and Hutchinsons, where goods were placed in an empty room, with
the door locked. Donee was given key to room with licence to enter.
- Telling where goods will be found (see Thomas v The Times Book Co Ltd)
When is a gift complete in equity?
TEST from Corin v Patton:
- intending donor must have done everything which is necessary for him to have
done to effect a transfer of legal title.
ie. there is nothing left for the donor to do.
-

Necessary means necessary to effect a transfer


The donee must be equipped to achieve transfer of legal ownership

For example:
Donor still retained possession/control of certificate of title, therefore donor still
had something to do (ie hand over title), therefore gift is not yet complete (Corin v
Patton)

Sale:
Requires:
- Capacity
- Intention
- Formalities of transfer
Capacity:
For sale to stand, title owner must have capacity to gift property
- capacity is assumed to exist, unless facts prove otherwise.
- Grounds for losing capacity include being a minor or of unsound mind etc.
Intention:
For sale to be binding, parties must be ad idem (of the same mind) about the
essential terms
TEST:
- Alleged vendor must appear to a reasonable person;
- To have agreed to sell a proprietary interest;
- In a particular object;
- To the purchaser;
- For a particular price.
Formalities of transfer:
STEP 1:
Note the following as an introduction:

- all conveyances of land or any interest therein must be by deed. s52(1)


Property Law Act 1958 (VIC), unless specified in s52(2)PLA:
(a) assents by a personal representative ;
(b) disclaimers made in accordance with the provisions of any law relating
to bankruptcy or insolvency or not required to be evidenced in writing;
(c) surrenders by operation of law, including surrenders which may, by
law, be effected without writing; ie delivery
(d) leases or tenancies or other assurances not required by law to be made
in writing;
(e) receipts not required by law to be under seal;
(f) vesting orders of the Court or other competent authority;
(g) conveyances taking effect by operation of law.
- It is only at registration that property interests pass from one party to another
as per s.40(1) TLA.
- Registration satisfies s52(2) PLA and can be substituted for a deed
STEP 2:
Assess for:
- a deed of transfer; or
- one of the exceptions; or
- registration.
Effect of exercise of power of sale
Quote the following to summarise:
Breskvar v Wall confirms that a transfer of interest in Torrens land is not
complete until it has been registered. S.42 TLA provides that if an interest is not
recorded on the Register it is not binding on the registered proprietor. S.77(4)TLA
ensures that upon registration the purchaser is free from any other encumbrances
attached to the fee simple.
Testamentary Disposition (after death):
Includes: wills, intestacy.
Intestacy:
refers to death without a will
not relevant to us
Wills:
- A person may dispose of any property to which they are entitled at the time of their
death. s.4(1)(a) Wills Act
- A will has no effect until testator dies
- Therefore no interest can be acquired from a will until death.
ASSUME ANY WILL IN THIS UNIT IS VALID!
Death with a Will:
- generally the executor of the will is specified.
- If none is specified, an administrator is selected
- upon death land is transferred to the personal representative (ie the executor),
and is then backdated on the register so there are no gaps s.49TLA
- Once the will is gone throughm the executor transfers the land to the
appropriate parties s.41(10) Admin and Probate Act

Informal or incomplete transfers of Interests in land


Transfers for Valuable consideration:
Two types:
- parties believe they have done the correct thing but have made an error
- transfer is ok (therefore nothing further to do)
Parties believe they have done the correct thing but have made an error
Process of sale of fee simple:
1.Vendor and purchaser enter into contract of sale and purchaser pays deposit
(agreement and consideration).
2.Settlement 30-60 days after contract signing
3.At settlement, purchaser pays balance of sale price and receives executed
memo of transfer and certificate of title
4.Purchaser lodges docs at land registry
5.Legal title passes when registrar registers dealing
Disputes can easily arise during this process including:
- vendor dies between steps 1 and 2 (Lysaght v Edwards)
- purchaser fails to fulfil contract (Tanwar v Cauchi)
The process transfer is therefore incomplete
Incomplete transfers and equitable interests
-

Equitable interest is available where there is a specifically enforceable contract


for sale, as per Bunny Industries Ltd v FSW Enterprises Pty Ltd refining Lysaght
v Edwards.

If specific performance is not available, there is no equity (Tanwar v Cauchi)


eg. failure by purchaser to fulfil contract means vendor can cancel sale.

Equity exists as soon as contract is entered into, pending specific performance,


even if completion date has not arrived (Tanwar v Cauchi).

Availability of specific performance


Quote:
While a specifically enforceable contract for sale will generally lead to an equitable
fee simple, as per Bunny Industries, Tanwar says that specifically enforceable
contracts may only entitle a party to an equitable lien. However, if a party has done
everything in their power to facilitate the transfer of title (including paying the full
purchase price and taking possession of the certificate of title) Tanwar will not apply
and a full equity fee simple will be available.
TEST:
Contract must be:
1(a): specifically enforceable at law, as per s.126 Instruments Act;
or
1(b): be sufficiently part-performed by party seeking remedy to be
enforceable in equity.
and
2: court must be prepared to exercise its discretion in favour of party seeking
specific performance
1(a): s. 126 Instruments Act

To satisfy this contract must be in writing and incl:


- a description of the land;
- identification of the parties;
- a statement of what the transaction is;
- signature of party or their agent.
1(b): Equitable doctrine of part performance
allows for oral contracts
TEST (taken from McBride v Sandland):
FILL IN ONCE SPOKEN TO SAVITRI
Nb\ Merely paying a deposit is not enough to be considered part-performance
(McBride v Sandland)
2. Courts discretion:
- available legal remedies are insufficient (we should assume they are
not)
- cannot involve maintenance of personal relationships
- likely if D has not fulfilled their responsibilities
- will not unless P has fulfilled or is ready and willing to fullfill their
duties.
Voluntary Transfers
When is a gift complete in equity?
TEST from Corin v Patton:
- intending donor must have done everything which is necessary for him to have
done to effect a transfer of legal title.
ie. there is nothing left for the donor to do.
-

Necessary means necessary to effect a transfer


The donee must be equipped to achieve transfer of legal ownership

For example:
Donor still retained possession/control of certificate of title, therefore donor still
had something to do (ie hand over title), therefore gift is not yet complete (Corin v
Patton)

Adverse Possession
possession enjoyed without the permission of the person with a superior right to possession.
Elements of Adverse Possession (from Pye v Graham):
1. Factual Possession
2. Intention to Possess
3. Possession without consent of true owner
1. Factual Possession
must be:
- actual
- open (would be noticed by an owner reasonably careful of his interest (Riley)
- continuous
- exclusive
- modes of use suited to the character of the land, using its natural benefits is very
helpful (Munane v Findley)
- if anyone else is using the land, exclusive possession will only be found if other
person has been given permission to use the land by adverse possessor.

Can claim exclusive use (and therefore adverse possession) over a part of land.
eg. If you put the boundary in the wrong place.

This appropriate level of physical control imports a requirement that it be open, not
secret, peaceful, not by force, and adverse, not by consent of the true owner; Mulcahy
v Curramore.
All other types of possession will fail to extinguish the true owners title; McDonnell v
Giblin.
The onus of proof of acquisition of title by adverse possession lies with the possessor,
who must discharge the onus on the balance of probabilities; Cawthorne v Thomas.
The control must be single and exclusive; Powell v McFarlane.
It follows that occupation of the land with the owners consent will not be sufficiently
adverse. If the true owner has given permission in the form of a license or lease then the
possession cannot be considered adverse; Hughes v Griffon.
Possession must be open- Lord Advocate v Lord Lovat: The claimants possession
must be open, notorious and unconcealed => ensures the paper title holder has the
opportunity to challenge the possession.
Moreover, the question of what acts constitute a sufficient degree of exclusive physical
control must depend on the circumstances, in particular the nature of the land and the
manner in which land of that nature is commonly used or enjoyed; Powell v McFarlane.
The possession must amount to more than a mere occupation of the property; the
possessor must prove that he or she has possessed the property in a manner which is
directly inconsistent with the rights of the true owner.
The occasional use of land, for example, as a convenient shortcut or for other recreational
purposes will not constitute adverse possession where it is not inconsistent with and does
not interfere with the purpose for which the true owner intended to use the land; Leigh v
Jack.
2. Intention to possess
- must show intention to possess for time-being. ie not forever, but not until a set time,
to the exclusion of all others as far as is practical (Pye v Graham)
- Future intention not important
eg: P vG: was happy to pay for land if asked, but in the mean time retained
possession

must have intention to exclude all others, including owner


o not necessary to know who owner is, but must still intend to exclude
them (Malter v Procopets)
eg M v P: misplaced boundary fence, party claiming adverse possession thought land was
theirs. intent found
-

intention must be clear on acts not on statements taken from party seeking possession
no requirement that use of adverse possessor is inconsistent with fee simple owners
(WCC c Abbatangelo)

Powell v McFarlane: Slade J: not only must the intention to possess be present but that
intention should be made clear to the world. The intention should be clear from the acts
themselves.
Suggests that certain acts may be so obvious as to satisfy such a test: the cultivation of
agricultural land and the fencing of land are examples.
3. Possession without consent of true owner
but must be open (would be noticed by an owner reasonably careful of his interest (Riley)
Limitation of Actions
Quote:
Limitations of Actions Act (LAA) sets limitation periods for when a person can claim
adverse possession. Under s.18 LAA, the expiration of the limitation period extinguishes title
to the land. s.8 LAA sets the limitation period at 15 years, pending exceptions* outlined in s.7
LAA.
* Adverse possession cannot be claimed against (ie exceptions):
- the crown (s.7 LAA)
- Public Transport Corp.; Victorian Rail Track (s. 7A LAA)
- Water Authority (s. 7AB LAA)
- Local Councils (s.7B LAA)
- Body corporate cannot claim over common areas (s.7C LAA)
Steps to determine limitation of actions:
1. note that after limitations period expires, title is extinguished (s.18 LAA)
2. clock starts ticking at moment party goes into adverse possession
3. set out potential times at which party could have taken adverse possession and when
these times would mean the 15 years would end
4. assess particulars of facts, incl:
- is fee simple owner deceased?
- is there a future interest in the fee simple?
- is a lease holder taking adverse possession?
- has there been multiple adverse possession?
5. has the clock been stopped?
6. can time be extended?
1. after limitation period expires, title is extinguished
expiration of the limitation set in s.8 LAA bars an action and extinguishes title of the
land (s.18 LAA)
2. When does the clock start ticking against person who has been in actual
possession of disputed land?
TEST:

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- Dispossession (s.9(1) LAA)


or
- Discontinuance (s.9(1) LAA)
But
- There must be someone else in adverse possession (s.14 (1) LAA)
ie. if you are in possession and are dispossessed or discontinue possession, the clock
will start ticking at the moment that someone takes adverse possession.
3. Set out times of possible adverse possession
- assess the merits of each potential act of adverse possession
- work out the most likely of these to be accepted as the time when adverse
possession was taken
- work out 15 years past this date
- has the fee simple owner taken possession in this time?
4. What if (scenarios based on particular facts)
(a) When does clock start ticking if fee simple owner died in possession but
beneficiary seeking to recover land never took actual possession?
- Clock will start on day of death (s.9(2) LAA), provided someone was
in adverse possession (s.14(1))
- If adverse possession not taken on day of death, will commence
when adverse possession is taken (s.14(1))
eg. dies on 10/1/09. squatter comes 10/1/09. clock starts 10/1/09.
dies on 10/1/09. squatter comes 10/6/09. clock starts 10/6/09.
(b) When does the clock start ticking where transferor was in possession
at time of transfer but transferee seeking to recover land never took
actual possession?
-

Clock will start on day of transfer (s.9(3) LAA), provided someone


was in adverse possession (s.14(1)LAA)
If adverse possession not taken on day of transfer, will commence
when adverse possession is taken (s.14(1)LAA)

eg. transfer 10/1/09. squatter comes 10/1/09. clock starts 10/1/09.


transfer 10/1/09. squatter comes 10/6/09. clock starts 10/6/09.
(c) When does the clock start ticking for a future interest?
-

Clock will start on day future interest matures and becomes an


interest in possession (s.10(1) LAA), provided someone was in
adverse possession (s.14(1)LAA)
If adverse possession not taken on day of maturation of future
intereset, will commence when adverse possession is taken
(s.14(1)LAA)

eg. matures on 10/1/09. squatter comes 10/1/09. clock starts 10/1/09.


matures on 10/1/09. squatter comes 10/6/09. clock starts 10/6/09.
(d) What if a future interest exists, and dispossession comes before the
future interest starts
- Clock will start on day of dispossession (s.9.1 LAA), provided
someone takes on adverse possession. (s.14(1)LAA)

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If adverse possession not taken on day of maturation of future


intereset, will commence when adverse possession is taken
(s.14(1)LAA)

Clock will stop (s.10(2) LAA):


- 15 years after adverse possession
or
- 6 years after future interest starts
whichever is later
eg. a life tenant has bequeathed a future interest
LT dispossessed in 2002. LT dies 2005. FI holder has until 2017
ie. 2002 +15 = 2017; 2005 + 6 = 2011; take later date
LT dispossessed in 2002. LT dies 2013. FI holder has until 2019
ie. 2002 +15 = 2017; 2013 + 6 = 2011; take later date
(e) What if a tenant is in adverse possession against a landlord?
ie. lease expires, but tenant continues as tenant at sufferance or despite
express disallowance.
- Clock will start on day lease expires
- have 15 years from that date
(f) What if a 3rd party is in adverse possession of a rental property?
ie (as per s13(3)LAA):
- a person has a lease in writing and pays more that $2 per year in rent;
and
- the rent is received and accepted by someone who shouldnt be
accepting it;
and
- no rent is therefore received by the rightful party
and
- limitation lapses
person receiving rent will take over fee simple
-

Clock will start on day rent was first received by wrong party
have 15 years from that date

eg. If a person pays rent to the wrong person for 15 years, and no-one
notices, the person receiving the money becomes fee simple owner .
(g) What if a stranger takes possession of leased land during a lease?
ie a stranger takes possession from the tenant
- landlords interest is considered a future interest (Fairwetather v
Marlybone)
Therefore:
- Clock will start on day future interest matures and becomes an
interest in possession (s.10(1) LAA) (ie time stranger takes possession
from tenant), provided someone was in adverse possession
(s.14(1)LAA).
(h) what happens if an assurance is made after the clock has started
ticking?
No person shall bring an action to recover an interest under an assurance
taking effect after the right of action to recover the land had accrued to the
person by whom the assurance was made or some person through whom he
claimed or some person entitled to a preceding estate or interest, unless the

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action is brought within the period during which the person by whom the
assurance was made could have brought such an action. (s.10(3) LAA)
ie. s.10(3) LAA means: if an assurance (eg leaving in a will etc.) is made after
the cause of action that has commenced the limitation of actions, the clock
continues to tick from the original cause of action.
-

eg.:
X is fee simple owner of land
Squatter in adverse possession of land since 01/01/95
X dies on 01/01/07 and leaves the land to A for life and B in fee simple
remainder.
Time would have run out for everybody come 01/01/2010 (i.e. 15 years after
the cause of action accrued to X)

(i) what happens if successive parties take adverse possession?


- person in adverse possession passes on this interest
- true owners title is extinguished once successive periods of adverse
possession add up to statutory period
- person in adverse possession at the expiration of the statutory period has title
that is good against the whole world
- abandonment restarts the clock. It wont restart until adverse possession is
retaken. (s.14(2)LAA)
5. Has the clock been stopped?
The clock stops if:
- abandonment by adverse possessor (s.14(2) LAA)
- acknowledgement in writing by adverse possessor or their agent of the title of the
person to whom the rightful owner or their agent(ss.24, 25 LAA)
- person with right of action initiates action to recover land
- person with right of action resumes possession of land
6. Extension of time:
Available for:
a)disability
b) war
c)fraud/fraudulent concealment
d) mistake
(a) Disability
Includes people who are:
- minor or of unsound mind (ss3(2),3(3) LAA)
- subject to guardianship for intellectual disability (ss3(2),3(3) LAA)
- if disability is shown to exist at time right of action was first accrued;
- period may be extended by 6 years;
- from date of ceasing of disability (s23(1)LAA)
nb\ death = ceasing of disability
-

maximum extension of 30 years

(b) War
- must have effect of practicality of recovering land
- s.22 LaA
(c) Disability
- must be fraud of person claiming adverse possession
TEST: (s.27 LAA)

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Where, in the case of any action for which a period of limitation is prescribed by
this Act
(a) the action is based upon the fraud of the defendant or his agent or of any
person through whom he claims or his agent;
or
(b) the right of action is concealed by the fraud of any such person as aforesaid;
-

clock starts at discovery of fraud, or when fraud could have, with reasonable
diligence, been discovered.

(d) Mistake
TEST: (s.27 LAA)
Where, in the case of any action for which a period of limitation is prescribed by
this Act
(c) the action is for relief from the consequences of a mistake
-

clock starts at discovery of mistake, or when mistake could have, with


reasonable diligence, been discovered.

Title of Adverse Possessor


- based on possession
- is independent of the title of the person he or she disposes (Fairweather v Marlybone)
ie adverse possessor is not he successor in title to the person who was dispossessed.
Adverse possession and the Torrens system
- Adverse possession is an exception to indefeasibility (s.42(2)(b) TLA)
- ss60, 62 TLA outline procedure for a possessor to become registered
nb\ registration is not necessary to acquire title

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Leasehold Estates
Leases Step 1: is it a lease (or licence)?
2 Characteristics
- exclusive possession (Radiach v Smith)
- certainty of terms
Exclusive Possession
The right of the grantee to exclude the grantor as well as 3 rd parties from the area in
question (Radiach v Smith)
- occasional visits for specified purposes (eg. repairs, inspections etc) do not
break exclusivity. In fact such provisions emphasise exclusivity by specifying
when grantor is not excluded.
- If an agreement involves the carrying on of a business, we can often presume
that it gives a right of exclusivity and right to exclude (Radiach v Smith)
Exclusive possession determines if the agreement is a lease or a licence
Lease or Licence?
- label used is not decisive;
- nature of rights created must be assessed, looking at the objective intention
(what would a reasonable person think the intention was?)
TEST:
- does the agreement give grantee right to exclusive possession?
If yes: is a lease
If no: is a licence

continue to step 2 overleaf

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Leases Step 2: what type of lease is it?


Four Types of Leases
fixed term lease
periodic lease*
tenancy at will
tenancy at sufferance
*assess if RTA is applicable
Fixed term lease:
- always created by express agreement
- maximum duration of the lease must be known with certainty at the time the
lease is to take effect
eg. A grants B a 5 year lease, with provision to break lease early. Maximum is
known (5 years)
Periodic Lease
- lease is for a definite period which is automatically renewed at the end of the
initial period
- created by express agreement
or
- implication of law.
eg. month-by-month lease
Periodic Lease by implication of law
3 means of creation:
- tenant remains after fixed term lease expires, and continues to pay rent, unless
there is evidence to the contrary.
eg. A reference to such a thing happening in the original lease
-

where a person moves into a premises and starts paying rent pursuant to:
- an agreement for a lease;
or
- a purported lease, which turns out to be void or unenforceable
see Atler Pty Ltd v CFFC Australia Ltd
nb an equitable lease may be more appropriate in such a scenario, as
per Walsh v Lonsdale

Where a person moves into premises and starts paying rent, while negotiations
for a formal lease are undertaken
see Turner v York Motors:
Facts:
- T allowed possession of land while negotiations were on foot
- T paid monthly rent to S (land owner), who accepted it
- T increased amount of land he was using, and paid correspondingly
larger rent
- S sold land to YM
- T continued to pay rent to YM, for 3 months
- YM accepted rent
- After 3 months, YM stopped accepting rent, gave notice for T to
vacate
Finding:
A periodic lease was created by the implication of law due to:
- on going payment and acceptance of rent;
- rent was paid in a periodic fashion
- rent was paid consistently
length of a periodic lease is overleaf

16

Length of a Periodic lease


Essentially whatever lessor and lessee intended
This is found by:
- express statement
or
- surrounding circumstances
or
- period by reference to which rent was calculated
Where RTA is applicable:
Periodic tenancy is present if:
s.230(1) RTA:
a) the term of a fixed term tenancy agreement to which this Act applies ends;
and
b) the tenant continues in occupation of the rented premises without a new
fixed term tenancy.
Rental period of periodic lease is determined by length of fixed term lease:
- if the rental period under the fixed term tenancy agreement was more than
1 month, a monthly period (s.230(2)(a) RTA)
- if the rental period under the fixed term tenancy agreement was 1 month or
less, a period equivalent to that rental period.
The periodic tenancy agreement is on the same terms, so far as applicable, as the
terms of the fixed term tenancy agreement. (s.230(3) RTA)
Tenancy at Will
- can be created be express agreement
- can be created by implication of law
Tennancy of Will arises by implication of law where:
- a person takes possession:
- with permission
but
- no agreement as to length of stay
- without payment of rent
or
- a tenant under a fixed term lease continues to possess property:
- with permission
but
- without paying rent
- can be brought to an end at any time without a period of notice
- can be ended by either the tenant or landlord
- comes to an end it tennance of landlord dies
- comes to an end after 12 months if not earlier terminated, as per s13 Limitation
of Actions Act
- no implied right to sub-lease or assign
Tenancy at Sufferance
- Arises when a tenant under a previously existing lease continues in possession
after lease expires without landlord expressly allowing or disallowing
ie. landlord says nothing.
- ends when tenant leaves or is kicked out.
- no implied right to sub-lease or assign
Registered Leases
- leases longer than three years may be registered (ss.66(1) and 77(1) TLA)
- sub-leases longer than three years may be registered (s.71(1)TLA)

17

Registered leases are a legal interest (s.40(2)TLA)

18

Leases Step 3: does the RTA apply?


- assess for any exceptions
- yes: assess to see if lease satisfies RTA
- no: skip RTA
Residential Tenancy Act
- generally codifies the rules regarding residential tenancy.
- provides consumer protection
Application of the RTA
- applies to premises all used primarily for residential purposes, but for
exemptions listed below. (s.7 RTA)
- applies even if a trade or business is also carried on by the tenant on the premises
(s.7RTA)
- A tenancy agreeement is an agreement, whether or not in writing, and either
express or implied, under which a person lets premises as a residence (s.3(1)RTA)
- The RTA always overrules the terms of a contract (s.27 RTA)
Exemptions:
RTA does not apply to:
- Fixed term tenancies longer than 5 years (s.6(1)(a)RTA)
- Short lease of landlords principal place of residence (s.9 RTA)
- Premises usually used for holiday purposes (s.10 RTA)
- if rented premises are on land rented to the tenant for the purpose of grazing
(s.11(a)RTA) or farming, incl crops, tree-farming & bee-keeping (s11(b)RTA)
- Colleges and schools (s21 RTA)
- Temporary crisis accommodation (s22 RTA)
- Health services (s23(a) RTA); residence ancillary to health services (s22(b)
RTA)
- Hotels and motels, unless fixed term tenancy longer than 60 days (s20 RTA)
- if the rented premises form part of a building in which other premises are let by
the landlord to the tenant for the purpose of a trade, profession or business
carried on by the tenant.(s.8 RTA)
-

A tenant or landlord may apply to VCAT for exemption (s.24(1)RTA)


rooming house and caravan park owners may apply to VCAT for exemption
(s.24(2)RTA)

TLA implied terms (for registered leases only?)*


Terms to be implied in all registered(?) leases are defined at s.67 TLA as including:
- rent will be payed at the agreed amount, at the agreed time, for the length of
the lease (s.67(1)(a) TLA)
- the lessee will keep the property in good repair, except for accidents, storm
damage and reasonable wear and tear excepted (s.67(1)(b) TLA)
- once a year an inspection may be undertaken. Must be at a reasonable time of
day (s67(1)(c)TLA).
- if rent is wholly or in part one month late, the lessor may enter the property
and retake possession. No legal demand is required.
- if a covenant is breached for a month, the lessor may enter the property and
retake possession. No legal demand is required.
* Any of these implied terms can be contracted out of or modified (s112(1)TLA)

19

Common law implied terms (in absence of contrary express provision)


Implicitly, landlord promises:
-

to allow the tenant quiet enjoyment of the property;


quiet = peaceful, rather than without noise (Southwark Borough Council v
Baxter)
temporary disturbance is not a breach (Glasshouse Investments Pty Ltd v
MPJ Holdings Pty Ltd)

not to derogate from this grant;


landlord cannot promise lessee use of land and then detract from that either
themselves or through a later tenant
in the case of furnished dwellings, to provide the premises in a state fit for
habitation at commencement.

Implied warranty where a lease is executed prior to completion (Miller v


Cannon Hill Estates)

Implied condition where habitation is furnished (Smith v Marrable)

Implicitly, tenant promises:


- Use premises in tenant-like manner (Warren v Keen); and
- To yield up premises at expiry of the lease.
Must vacate on time; not leave rubbish beyond minimal quantity (Waterhouse
v Waugh)
Consequences of breach

continue to leases step 4 overleaf

20

Leases Step 4: are there any lease assignments or subleases?


yes: assess validity
no: continue to leases step 5
Lease assignment & sub-leases
Important to determine if it is an assignment or a sublease because it affects the ensuing
relationships (see next page).
Lease assignment
TEST:
Has the tenant :
- transferred the whole or remaining term of his lease to another person
or
- purported to create a new leasehold estate in another person, for the remainder
of the lease
Sub-lease
TEST:
Has the tenant:
- created a new leasehold, the duration of which is less that the remainder of the
original lease
or
- purported to transfer to another person anything less than the whole of the
remaining term of the lease
if remainder of lease is transferred = lease assignment
if less than remainder is transferred = sublease
Note:
- language used and title given to transfer are not important
- only assess the length of the transfer
- can assign or sub-lease a portion of a property eg. sub-letting a room
Covenants against sub-leases and assignment
*** first assess if the lease is governed by the RTA ***
Non-RTA leases:
- unless the lease forbids it, there is an implied right to assign or sublease without the
landlords consent. (not available for tenancy at will or tenancy at sufferance)
- lease can (and usually will) forbid sub-letting and assignment without consent
- lease can completely forbid sub-leasing and assignment
where lease requires landlords permission
- landlord must assess the request reasonably (s144(1) PLA)
UNLESS
- have contracted out of reasonableness requirement, as allowed by s.144(1) PLA
RTA leases:
In order to sub-lease or assign, the tenant must:
- get landlords consent (s81(1) RTA)
- landlord cannot unreasonably withhold consent (s.81(2)RTA)
- an assignment or sub-lease without consent is invalid (s.81(3)RTA)
- Landlord cannot demand a fee to give consent (s.84 RTA)

21

Lease assignment
TEST:
Has the tenant :
- transferred the whole or remaining term of his lease to another person
or
- purported to create a new leasehold estate in another person, for the remainder
of the lease
if remainder of lease is transferred = lease assignment
Note:
- language used and title given to transfer are not important
- only assess the length of the transfer
- can assign or sub-lease a portion of a property eg. sub-letting a room
Relationships between parties after legal assignment of legal lease
- Landlord (L) (fee simple) has a lease with the tenant (T)
- Tenant has an assigned lease with assigned lessee (A)
Relationship between L and A after assignment:
Privity of estate :
- L and A in landlord-tenant relationship:
- can enforce against each other any covenants which touch and concern the land
(or possibly all covenants per s45(2) TLA)
- touch and concern = have reference to the subject matter of the lease (Davis v
Town Properties Investment Corp Ltd)
Relationship between L and T after assignment:
- privity of estate ends and tenant no longer has property interest
- Privity of contract: depending on the wording of lease covenants, T may continue
to be liable to L for breaches of covenant even after the assignment.
- Unless expressly contracted out of, T is contractually liable to L for actions of A
(s.79 PLA (1))
Sub-lease
TEST:
Has the tenant:
- created a new leasehold, the duration of which is less that the remainder of the
original lease
or
- purported to transfer to another person anything less than the whole of the
remaing term of the lease
if less than remainder is transferred = sublease
Note:
- language used and title given to transfer are not important
- only assess the length of the transfer
- can assign or sub-lease a portion of a property eg. sub-letting a room
- Termination of head lease automatically leads to termination of sub-lease
Although PLA s146(4) contains additional protection for subtenant affected
by forfeiture of head lease.
Court can make an order requiring head leasor to grant new lease to
sub-lessee (where sub-lessor has erred); but only if sub-lessee played
no part in sub-lessors ways
Relationships between parties after sublease
- L leases (head lessor) to T (sub-lessor), who subleases to S (sublessee)

22

Relationship between L and S after sublease:


- NO RELATIONSHIP:
- S cannot impose covenant of head lease and sublease against L, and vice-versa
Relationship between L and T after sublease:
- Privity of estate and privity of contract continue pursuant to head lease
- Can impose all applicable covenants
Relationship between T and S after sublease:
- Privity of estate and privity of contract pursuant to sublease
Assignment of Landlords Reversion
A landlord (L) may, during the middle of a lease, assign their fee simple property interest to
another person (R). What happens to the interests of the tenant (T)?
Relationship between R and T after assignment:
- Privity of estate: the benefit (s141 PLA) and burden (s142 PLA) of every covenant
having reference to the subject matter of the lease passes with the landlords
interest.
- Having reference to the subject matter of the lease has the same meaning as
touching and concerning the land
Relationship between L and T after assignment:
- Privity of contract: depending on the wording of lease covenants, L may continue to
be liable to T for breaches of covenant even after the assignment.
- Section 79 PLA:
(1) A covenant relating to any land of a covenantor or capable of being
bound by him, shall, unless a contrary intention is expressed, be deemed
to be made by the covenantor on behalf of himself, his successors in title
and the persons deriving title under him or them, and, subject as
aforesaid, shall have effect as if such successors and other persons were
expressed.

23

Leases Step 5: Has the lease agreement been breached, including sub-lease/assignment?
yes: continue to leases step 6
no: no problem with lease, make judgement and move on
Termination of Leases
Leases Step 6: assess for means of Termination
*** Method of termination depends on if it is governed by RTA or not ***
Non-RTA leases:
4 methods of termination:
- Forfeiture
- Repudiation
- Merger (not examinable)
- Surrender (not examinable)
Forfeiture (check intro from mid-semester answer)
Landlord can terminate lease by re-entering land, if
TEST:
- under common law, tenant breaches and essential term*
or
- pursuant to forfeiture clause in lease (express or implied by s67 TLA)
nb/ s.67 TLA implies a forfeiture clause into registered leases in the absence of one, but
this can be contracted out of by an express term (s.112 TLA)
* unless a term is specified as being an essential term, it is unlikely to be one (Shevill v
Builders Licensing Board) therefore this is hard to prove, so must rely on a forfeiture
clause (either express or implied)
Right of re-entry:
Exercised by:
- physically and peasefully re-entering land;
- bringing action for possession against tenant
nb/ Registrar must remove the lease from the register before forfeiture is complete
(s.70 TLA)
Forfeiture pre-conditions:
Breach of covenants other than failure to pay rent (ie s.146 PLA)
s.146(1) PLA requires notice before forfeiture, which:
- specifies the breach (s.146(1)(a) PLA);
- where possible, requires the lessee to remedy the breach (s.146(1)(b) PLA);
- requires lessee to make compensation in money for the breach (s.146(1)(c) PLA)
Failure to comply with notice:
- tenant has a reasonable time thereafter (at least 14 days) to comply (s.146(1)PLA)
Failure to pay rent
- Is not considered a breach of an essential term unless labelled as such (Shevill v
Builders Licensing Board)
- Is distinct from s.146 breaches
- in the absence of a contrary provision, re-entry cannot be exercised without a
formal demand.
but

24

- after 6 months of failure to pay, no demand is required (Supreme Court Act s.78)
Relief against forfeiture
Even if the landlord has the right to forfeiture, the court may stop them from exercising the
right, or reinstate a lease terminated due to forfeiture.
- Courts have statutory power to grant relief under PLA s 146(2) & Supreme Court Act
ss 80 and 85 (and can also grant relief under equity)
Equitable relief unlikely for tenant where they have behaved poorly
- Grant of relief is at the courts discretion. See Jam Factory v Sunny Paradise Pty Ltd
[1989] VR 584 for example of court exercising discretion in a case of forfeiture for
non-payment of rent.
- Termination of head lease automatically leads to termination of sub-lease
Although PLA s146(4) contains additional protection for subtenant affected
by forfeiture of head lease.
Court can make an order requiring head leasor to grant new lease to
sub-lessee (where sub-lessor has erred); but only if sub-lessee played
no part in sub-lessors ways
Repudiation
Contractual doctrine of repudiation is applicable to leases (Progressive Mailing House v
Tabali)
Arises from:
- breach of an essential term
- by renunciation*
- serious breach of a non-essential term*
nb/ s.146 PLA notice requirements must be followed (see below)
Breach of an essential terms
- when dealing with leases, very few terms are considered essential (Gumland Property
Holdings Pty Ltd v Duffy Bros Fruit Market (Cambelltown) Pty Ltd)
- If a term is labelled essential, it is essential
Renunciation*
- occurs when the tenant has made it clear that they no longer intend to be bound by the
lease
Serious Breach of a non-essential term*
assess based on:
- performs with many and consistent breaches that on their own are not so serious, but
the cumulative effect is serious. (Carr v Beriman)
- breaks a number of warranties continually, which, when taken together, can be
enough for repudiation. (Progressive Mailing House v Tabali)
*** Renunciation and serious breach of non essential term are only likely to be successful
in extreme cases (Progressive Mailing House v Tabali)***
Notice requirements uner s.146 PLA
s.146(1) PLA requires notice before forfeiture, which:
- specifies the breach (s.146(1)(a) PLA);
- where possible, requires the lessee to remedy the breach (s.146(1)(b) PLA);
- requires lessee to make compensation in money for the breach (s.146(1)(c) PLA)
Failure to comply with notice:
- tenant has a reasonable time thereafter (at least 14 days) to comply (s.146(1)PLA)

25

If repudiation is shown:
- innocent party can choose to accept this and treat lease as being at an end
- notice requirements must be met
Leases Step 7: Result of termination
Repudiation vs Forfeiture
Repudiation has the advantage because:
- innocent party gets out of lease
and
- can claim damages for loss of bargain (not available for forfeiture)
but
- if you bring repudiation and fail, you may have repudiated yourself, by renunciation
*** where possible run repudiation and forfeiture together ***

Termination of RTA leases:


governed by s.216 RTA
- if tenant continues in possession after termination of lease, landlord must follow
procedure set out in part 7 of RTA (as per s.216 RTA)
- attempting to regain possession in any other way is an offence (s.229 RTA)

26

Mortgages:
Torrens System Mortgages:
Introduction:
- Registered Proprietor of any land may mortgage it in an appropriate form (s.74(1)
(a)TLA)
- Any mortgage shall when registered act as a security, and be an interest, but is not a
transfer of the land. (s.74(2) TLA)
- Any transfer of a mortgage interest provides a right to sue the debtor to recover the
debt secured by the mortgage (s.46TLA)
Five Remedies of Registered Mortgagee:
- personal action to recover debt
- entry into possession (not covered)
- appointing a receiver (not covered)
- foreclosure (not covered)
- power of sale
Personal Action to Recover Debt:
- a personal remedy, as opposed to a remedy brought against an asset
Power of Sale
Most important remedy.
-

a registered mortgagee, upon default by mortgagor, has the right to the sell the
mortgagors interest in the land. (s.77TLA)
Any transfer of a mortgage interest provides a right to sue the debtor to recover the
debt secured by the mortgage (s.46TLA)

Preconditions for Exercise of Power of Sale (s76 TLA)


TEST:
1. Default: of payment of principle or interest or in performance of any other
covenant;
and
2. Default Period: default must have continued for at least 1 month or some other
period as specified in mortgage contract*
and
3. Notice: following default period notice in writing to pay or perform
and
4. Notice period: at least one month or time specified in contract* must be given
before mortgagee has right to sell.
*if time is separate cannot be too sever; must be reasonable.
If preconditions are all met
Mortgagee may in good faith with regard to the interests of mortgagor sell the
property. (s77(1)TLA)
act in good faith:
- not act fraudulently
- not to wilfully or recklessly sacrifice the interests of the mortgagor
*** quote the following to explain what act in good faith means ***
Pendlebury v Colonial Mutual Life Assurance indicates that acting in good faith
requires the mortgagee to not wilfully or recklessly sacrifice the interests of the
mortgagor. Henry Roach (Petroleum) Pty Ltd v Credit House (Vic) Pty Ltd found that
regard to the interests of the mortgagor equates to a duty to obtain a proper price, and

27

that this should include taking reasonable steps to get an accurate evaluation.
Reasonable steps to get market value, including advertising the property, should also
be undertaken. Goldcel Nominees Pty Ltd v Network Finance Ltd expanded this to
mean a mortgagee must take reasonable steps to obtain the best price at the time of
sale.
Mortgagees duty also includes:
Henry Roach (Petroleum) Pty Ltd v Credit House (Vic) Pty Ltd
- duty to take reasonable care to obtain a proper price
- must take reasonable steps to value land before selling it (eg advertising)
- must get proper price for property given the time available for sale
- this duty does not prevent the mortgagee from putting their interest first
Goldcel Nominees Pty Ltd v Network Finance Ltd
- duty to take reasonable steps to obtain the best price
- best price = higher standard required of mortgagee
Vasilou v Westpac
- no advertising was used, but still got proper, best price so sale was ok
Effect of exercise of power of sale
Is the sale in question registered?
Yes: cannot get injunction; registered interest is protected (s.77(4)TLA)
- cannot get sale reverse, but can sue mortgagee for damages
Quote the following to summarise:
Breskvar v Wall confirms that a transfer of interest in Torrens land is not complete
until it has been registered. S.42 TLA provides that if an interest is not recorded on the
Register it is not binding on the registered proprietor. S.77(4)TLA ensures that upon
registration the purchaser is free from any other encumbrances attached to the fee
simple.
*** the equity of a mortgagor whos interest has been sold incorrectly cannot be
protected by a caveat (Swanston Mortgages)
No: can get an injunction halting sale
- person who purchased from mortgagee can get mere equity due to setting aside for
improper action by mortgagee.
Quote the following to summarise:
Swanston Mortgage Pty Ltd v Trepan Investments Pty Ltd indicates that a
specifically enforceable contract of sale between mortgagee and purchaser passes
equitable fee simple to the purchaser. However, until registration [the mortgagor] is
still fee-simple owner. As such they can apply for an injunction restraining
completion of the sale (ie registration)
Proceeds of sale
- expenses from sale are recoverable (s.77(3)(a) TLA); then
- money due on mortgage is paid back (s.77(3)(b) TLA) ; then
- subsequent mortgages/fees are paid back (s.77(3)(c) TLA) ; then
- mortgagor gets anything left over (s.77(3)(d) TLA)

28

Unregistered Mortgages:
(aka Equitable mortgage):
Creation: (Theodore v Mistford)
- Facts:
- Mistford Pty Ltd sold land to Mobile Laboratories Pty Ltd
- mortgage to remain unregistered so long as Mobile Lab obeyed obligations in the
contract to sell
- but Theodores mum had fee simple to land yet had no part in the contract
- Findings
- no contract between Ms Theodore and Mistford, therefore no mortgage granted
-

it is possible to transfer equitable interest assuming part performance


especially note the mortgage by deposit of certificate of title (see Theodore v
Mistford)

statutory remedies only available to registered mortgagees not to equitable


mortgagees
- however, equitable mortgagee arising from mere that title documents were
deposited with intent to transfer land as a security for debt

nb/ Remedies for unregistered mortgages are not considered in this unit
Actions while the mortgage is on foot:
Preservation of asset value
- unless mortgage contracts says so, mortgagor can deal with the property as they like.
- the mortgagee has an interest in ensuring the value of the asset stays high, therefore
will usually include a term preserving the asset. eg. demanding permission be
sought before changes are made to the property
Repayment and Discharge
- once an instrument of discharged is registered, the mortgage is over (s.84 TLA)
- a mortgage will usually contain an express term providing for discharged upon full
payment
- if there is no express term, it is implied into contract.

29

Easements:
Two Types of easements:
- positive
- negative
Positive easement
gives a land owner the right to do something on neighbouring land
Negative easement
gives landowner the right to prevent something from being done on neighbouring land
Essential characteristics of easements:
TEST (from Riley v Penttila):
1. Dominant and servient tenements;
2. Must benefit dominant tenement;
3. One person cannot own and occupy both tenements;
4. Easement must be capable of being the subject of such a grant.
1. Dominant and servient tenements
- An easement over one land must benefit other land in the vicinity; cannot just benefit
the public at large.
- Do not have to have adjoining borders (re Ellenborough Park)
2. Must benefit dominant tenement
- The benefit derived by the dominant tenement must be foreseeable to a reasonable
person (Riley v Penttila)
- Must be connected with dominant tenements normal enjoyment
- Must be reasonably necessary for this enjoyment (Huckvale v Aegean Hotels Ltd)
- A question of fact (depends on nature of easement)
- benefit can be by way of benefiting a business that operates on the tenement
(Copeland v Greenhalf)
3. One person cannot own and occupy both tenements
- cannot have rights over yourself
- owner of dominant purchasing servient (or visa versa) extinguishes easement
4. Easement must be capable of being the subject of such a grant
Under re Ellenborough Park easements are of a sort which a grant can be made if:
TEST:
- Are the rights given too vague or wide?
- Are the rights are not of mere recreation
- Mere recreation is given a narrow reading
- Would rights given amount to rights of joint application or subbstantially deprive
occupation? Asses this based on (Weigal v Toman):
- Proportionality between servient tenement as a whole and the part to which
the easement applies;
- Extent of exclusivity claimed (cannot rob the owner of the reasonable use of
his land- (Weigal v Toman);
- Whether the easement arose by prescription or express grant; and
- Practicalities.
Examples of what can be a grant
- Using a garage that made up only a small part of the tenement (Weigal v Toman)
- use of a garden or park is not a mere right of recreation (re Ellenborough Park)
- use of a lake for recreational purposes (City Developments)

30

Creation of Easements
4 means of creation:
1. Statute
2. Express Grant or Reservation
3. Implied Grant or Reservation (not examinable)
4. Prescription
5. Recording Easements on the register
1. Statute
- incudes easements that common law may not recognise
- must examine statute for all factors to do with easement (eg characteristics,
enforcement etc)
2. Express Grant or Reservation
- if made pursuant to a contract, gives rise to an equitable easement. Therefore
get an interest in equity
- if grant is to be considered legal must be registered under s.45 or s.72 TLA.
- if not legal (ie registered) only equity is available
3. Implied Grant or Reservation
- not examinable
4. Prescription
- also known as acquisistion by lost modern grant
TEST:
- use or enjoyment must be by fee simple holder of dominant estate or their
estate over the fee simple owner of the servient tenement.
- ie only operates between fee simple owners
and
- has easement been used/enjoyed for at least 20 years continuous years?
- use can be across a number of fee simple holders consecutively.
- cannot be interrupted
and
- easement must have been enjoyed as of right
- use must be open not secret
- use must be peaceful, not forceful (no bullying etc)
- use must have taken place without permission
but
- must be acquiescence by servient tenenment owner
- servient tenenment owner must have had at least constructive knowledge
and
- servient tenement owner could have prevented use, but didnt
Rebutting Prescription
- is virtually irrebuttable
- only rebuttal is to show person alleged to have granted right was legally
incapable of granting
- showing that grant was never made intentionally is not enough.
Prescription is not applicable to:
- Air (s196 PLA)
- light (s195PLA)
5. Recording easements on torrens register

31

Easements can be recorded on the register under:


- s.45 TLA
or
- s.72TLA
Quote the following:
ss45 and 72 TLA both enable the registration of easements. S.72 provides for
easements more specifically, however it only allows the recording rather than
registering of an easement. It appears that the recording of an easement under s.72 is
to be considered registered, and therefore will be granted the rights of the
indefeasibility principle.
Extinguishing Easements
Easements can be granted for a specific length of time. Once this is up they cease
Other means of extinguishment:
1. By statute
2. Dominant and Servient tenements become owned by the same person
3. by express agreement
4. by abandonment
1. By statute
not examinable
2. Dominant and Servient tenements become owned by same person
cannot have a right over yourself
3. By express agreement
- enter into a contract with other party agreeing to relieve the right
- dominant tenement releases the servient tenement
- can apply to have the now redundant easement removed from the register
(s.73(1)TLA)
4. By abandonment
TEST:
- at a point in the past
- the owner of the dominant tenement
- formed intention to
- never at any time after assert their right to use the land
or
- if the easement has not been used for more than 30 years (Shelmerdine v Ringen)
nb/ even if 30 year rule is invoked, registrar is not compelled to remove under s73(3)
TLA. ie. if other evidence suggests not abandoned, even if dormant for 30+ years,
registrar can choose not to remove
Notes on abandonment:
- VERY difficult to establish (particularly first limb)
- non-use does not amount to abandonment
- court will consider ALL circumstances (depends on facts)
- the greater the period of non-use, the greater the chance that court will find
abandonment
- onus of proof on party alleging abandonment
- even if can be proven, remains enforceable until removed from the register
(Riley v Pentillor)

32

Profits a pendre overleaf


Profits A Pendre:
the right to enter another persons land and take from it part of its soil, natural produce or
wild animals
ie. right to take natural things. cant take things that have relied upon human labour
nb/ crops, farmed animals etc = cant take; wild animals = can take
Can be created by:
- express agreement (as for easement above)
- implied agreement (not examinable)
- prescription (as for easement above)

33

Trusts:
an equitable interest
Concept of a trust:
A trust exists where:
TEST:
- a person (trustee)
- has some right (subject of the trust)
- and is required by equity to use that right for the benefit (holds in trust)
- another person (object of the trust / beneficiary)
Subject of a trust:
can be either a legal or equitable interest
Object of trust / beneficiary:
- can be one or more persons
- can include trustee, provided trustee is not the sole beneficiary
3 Types of Trust:
1. express
2. resulting
3. constructive*
* if constructive is present or nearly present, assess for equitable estoppel.
1. Express Trust
occurs where a trust is directly created
TEST:
- capacity
- intention to create trust
- formalities
Capacity
For trust to stand, title owner must have capacity to make trust
- capacity is assumed to exist, unless facts prove otherwise
- Grounds for losing capacity include being a minor or of unsound mind etc
Intention to create trust
- is not necessary to know what a trust is, but must intend to create one regardless
- asses substance of what was intended
- intention is at time of alleged creation
- What matters is the outward manifestation of intention (Byrnes v Kendle [2011]
HCA 26)
- burden of proving intention falls on person alleging trust has been created
Formalities
2 Ways of creating express trust:
- by declaration
- by transfer/settlement
Declaration
s53 PLA sets out formalities, incl:
- must be in writing and signed **(s.53(1)(b) PLA )
- creator must declare themselves a trustee of the proprietary interest for the
beneficiary (s.53(1)(a) PLA )
eg. I will be the trustee of this land for my son
** declaration need not be made in writing, just manifested and proven in writing
as per Addamson v Hayes

34

IMP: PLA S53 (1)(a) probably doesnt apply to situation covered by 1(b)
By transfer
- creator transfers proprietary interest to another person to hold in trust for a
separate beneficiary
E.g. grandparents transfer their interest to their son to hold in trust for
their grandson.
- may be voluntary or valuable consideration
Volunteer:
Transfer is complete in equity is complete when Corrin v Patton test is
passed:
TEST:
- has donor done everything they need to do to complete the transfer?
Valuable Consideration
s53 PLA sets out formalities, incl:
- must be in writing and signed **(s.53(1)(b) PLA )
- creator must declare themselves a trustee of the proprietary interest for
the beneficiary (s.53(1)(a) PLA )
eg. I will be the trustee of this land for my son
** declaration need not be made in writing, just manifested and proven in
writing as per Addamson v Hayes
2. Resulting Trust
arises by operation of law where a person, who causes title to be obtained by another
person, is presumed not to have intended that the other person obtain the corresponding
beneficial interest.
*** s53 PLA does not apply ***
2 types of resulting trust:
- Automatic resulting trust
- Purchase Money resulting trust
Automatic Resulting Trust
- S has legal fee simple estate in Blackacre.
- S transfers estate to T to be held on trust for L for life
- S doesnt say anything about what happens to the beneficial interest after Ls
death
- T will be deemed to hold estate on trust for S in fee simple remainder
- SO, fee simple remainder goes back to S as they are presumed not to have
granted beneficial interest in the property
Purchase Money Resulting Trust
- A pays for an interest in land, but title is registered in name of B
- law presumes that legal title is held by B on trust for A (nb\ rebuttable)
or
- A pays , B pays , but title is registered under Bs name only.
- presumed that legal title is held by B on trust for A & B, in proportion to
amount contributed (nb\ rebuttable)
Rebuttal to presumptions:
can be rebutted by:
- evidence of contrary intentions
- presumption of advancement
Contrary intentions
- a common intention of A & B must be shown

35

Presumption of advancement
- Where husband or fianc or mother or father provides money for
purchase of property in name of wife/fiance/child, then presumption
that gift intended (ie expected to advance interests of wife/child)
- presumption of advancement can also be rebutted by evidence of
contrary intention of person assumed to be advancing interests
nb\ Calverley v Green: does not apply to de facto relationships
3. Constructive Trust
imposed to prevent a person with title to a property retaining a beneficial interest in the
property in circumstances in which it would be unconscionable to do so.
*** s53 PLA does not apply ***
2 Types of constructive trust*:
- common intention constructive trust
- joint endeavour
* if constructive is present or nearly present, assess for equitable estoppel, but note
that the outcomes for trust are generally preferable to those from equitable etoppel.
Common intention constructive trust
generally applies where no enforceable contract can be made out, but a party
has acted to their detriment due to a reliance on the promise (ie the common
intention), as per Ogilvy v Ryan
Requires:
TEST:
common intention
- express or implied
detriment
- material disadvantage
reliance
- causation; something you would not otherwise do but for prospect of
property interest
-

proof of intention or evidence of inferred intention is required


putting mind to intention is not enough.
must verbalise/write common intention.
Silence despite knowledge is not enough.

Joint endeavor constructive trust


Baumgartner v Baumgartner:
If you have a joint relationship that breaks down, but during the course of it
there was a pooling of resources, it would be unconscionable for one party to
retain all benefit
Should share benefit equally, but subject to injustice if one party has
contributed more than the other

Victorian interpretation (binding on Vic courts until HC rules otherwise:


Noordennen vRofe:
TEST:

36

did parties enter joint endeavor to create mutual financial benefits from the
property?

shown by:
- pooling all resources expenses and out-goings arising from their living
together, including outgoings associated with accommodation.
de facto or marriage relationship is good argument for joint endeavour, but is not
decisive (Noordennen vRofe)
nb\ Noordennen also says de facto can qualify
Quote:
Essentially we must ask if As contribution were related to the generation of
wealth as a part of a joint effort or endeavour to provide for the parties material
welfare and security (Lloyd v Tedesco)

Equity arising from estoppel:


Quote:
Proprietary estoppel, otherwise known as equity by acquiescence, occurs when a party
(A) encourages another (B) to believe that B has, or will have, some kind of enforceable right
in relation to certain property, and B then, to the knowledge of A, acts in reliance on that
belief to Bs detriment if the belief were false. In such a scenario, A can be estopped from
acting unconscionably against B.
TEST:
Has A:
-

induced or encouraged B to believe


that B has (or will be granted) some kind of enforceable right in relation to
certain property
And has B:
- to the knowledge of A (and without A doing anything to prevent it),
- acted in reliance on that belief
- in a manner which would be to Bs detriment if the belief were false
If proprietary estoppel can be shown
- B has equity arising from estoppel
- B has right to making good of assumption (Giumelli v Giumelli)
but
- lesser remedy is awarded if making good is unfairly harsh on A or a 3 rd party
(Giumelli v Giumelli)- lesser remedy can be sum of money rather than title, but
this can be with a charge over the property until this money is paid.
- Silence does not preclude estoppel where actions can be shown to portray the
promise (Walton Stores).
VIP: Proprietary estoppel leads to mere equity not full equity.
Equity to set aside due to Fraud
a transfer is able to be set aside for fraud against a 3 rd party (La Tech Investments and
Breskvar v Wall).
See case law for more details:
Latec Investments v Hotel Terrigal (HCA)

37

Facts:
- Hotel Terrigal was registered proprietor of fee simple in land and Latec Investments
had mortgage over land.
- Latec Investments sold land to Southern Hotels in exercise of mortgagees power of
sale
- Southern Hotels became registered proprietor of fee simple in land
- Southern Hotels granted MLC Nominees full equitable interest in land
- Per High Court: Hotel Terrigal had right to have sale by Latec Investments to
Southern Hotels set aside for fraud
Issue: Was Hotel Terrigal bound by interest of MLC Nominees?
- Depends on whether Hotel Terrigal had mere equity or full equitable interest
- Equity held to be enforceable against third parties; so could only be mere equity
- However, hotel was obtained fraudulently; so can get an exception to the
indefeasibility principle
- Hotel Terrigal did have right to set aside sale for fraud
- Equity depends on context
Breskvar v Wall (1969) CLR (same finding as Latec)
Facts:
- Mr and Mrs Breskvar registered proprietors of the fee simple in land
- Handed executed blank transfer of fee simple and certificate of title to Petrie as
security for loan of $1200
- Petrie (acting as agent for Wall) fraudulently procured registration of Wall (grandson)
as fee simple owner of land
- Wall contracted to sell land to Alban Pty Ltd
- Breskvars discovered fraudulent registration of Wall and lodged caveat against title
- Issue: Were Breskvars bound by interest of Alban Pty Ltd?
Findings:
- Petries fraud considered Walls fraud since Petrie was his agent
- Were Breskvars interests (fee simple land interest) a priority over subsequent
equitable interests of Alban Pty Ltd?
- Majority treated Breskvars interest as full equitable interest
- Other two judges were less sure, but proceeded on that assumption as it didnt
matter
- Unlike Latec, Breskvar still lost
Ruthol Pty Ltd v Mills and Others
Ruthol Pty Ltd registered proprietor of fee simple in land leased to Alphega
Ruthol granted the Mills an option to purchase land exercisable between 7 April 1997
and 30 June 1997 provided that Alphega did not exercise option to renew lease
1) Ruthol fraudulently represented to the Mills that Alphega had exercised option to
renew lease (as he did not want to sell at auction price) as a result, Mills did not
attempt to exercise option to purchase in time
2) In 1998, Ruthol granted Tricon an option to purchase land
3) In 1999, Mills discovered Ruthols fraud and purported to exercise their expired
option to purchase
4) Issue: Did interest of Mills take priority over interest of Tricon?
- NO:
- in a priority dispute, Mills et al can only rely on their abilty to proceed
against Ruthol on exercise of the option (mere equity) rather than the option
itself (full equitable interest)
- owner of benefited land has equitable proprietary intereste in burdened land
Horris Nominees
SO:

38

- WILL HAVE A FULL EQUITABLE INTEREST AGAINST A FRAUDULENT PARTY,


BUT ONLY A MERE EQUITY INTEREST AGAINST THIRD PARTY
Equity
2 types:
- Full equity
- mere equity
Full Equity
Applies to:
- leases
- easements
- liens
- charges
- mortgages
- fee simple
*** if you have a specifically enforceable contract as per 2.126 Instruments Act (see
page---) you will have a claim for full equity ***
Mere Equity
Requires the courts discretion to grant the equity
Applies to:
- proprietary estoppel
- tight to set aside for improper action by mortgagor (see page--)
** This is important for priority disputes (see page --)

39

Indefeasibility of Title
Quote:
s.42 TLA defines the indefeasibility principle, stating that except for the relevant exceptions,
the registered proprietor has rights over everything except whatever else may be registered on
the folio.
Breskvar v Wall indicates that the act of registration amounts to title.
Ask: is the person claiming indefeasibility a volunteer?
YES: see quote in volunteers and overriding legislation
NO: disregard and do not mention
Extent of Indefeasibility
Doctrine of immediate indefeasibility(Breskvar v Wall)
- registration is final
- indefeasibility is enacted at moment of registration
- doesnt matter if you register with a void instrument
Protection of individual terms in registered documents
Mercantile Credits v Shell Co of Australia:
- Not all terms get the benefit of indefeasibility.
- Indefeasibility is only granted to a term that adequately affects the estate or interest in
land with which the instrument deals.
TEST:
Is the term so intimately connected with estate or interest, which it qualifies and
defines, that it should be regarded as part of the estate or interest obtained?
YES:
get protection of indefeasibility
eg. Lease extension, included in a registered lease (Mercantile Credits v Shell)
eg. Unregistered lease provided it was an option outlined in a registered lease
(Eastoro Pty Ltd No. 2)
NO:
dont get protection of indefeasibility
eg. option to purchase included in a registered lease. (option is not sufficiently
important to the original lease)
Prior Registered Interests:
Registered Interests have priority in order of registration (s.34(1) TLA)
Unless:
registered interest specifically overrides prior registrations.
Encumbrances Recorded on Folio
s.42 TLA states that:
- The Registered Proprietor shall, except in the case of fraud, be bound by such
encumbrances as are recorded on the Register
- Thus, registered encumbrances also gain benefit of indefeasibility
eg. covenants, leases or licences etc.
NB/ even if nature and scope of encumbrance is unclear, person it bears on will be
bound if they should have known (constructive notice) about it. (Bursill v Berger)
- this may include looking beyond the folio

40

Exceptions to Indefeasibility
Quote:
[Party X] is the registered proprietor of the fee simple at the property. His interest is therefore only
defeasible if an exception to the principle of indefeasibility can be shown to be present. The statutory
exceptions to indefeasibility are defined by ss.42 and 77(4) TLA
Exceptions include:
1. tenant in possession of land (s.42(2)(e)TLA)
2. easements (s.42(2)(d)TLA)
3. adverse possession of land (s.42(2)(b) TLA)
4. Fraud (s.42(a) TLA)
5. In Personam exception
6. public right of way (s.42(2)(c)TLA) not examinable
7. crown grants (s.42(2)(a)TLA) not examinable
8. unpaid tax (s.42(2)(f)TLA) not examinable
1. Tennant in possession of land
as per s.42(2)(e)TLA
- applies to all leases (Burke v Dowes)
- does not cover option to purchase
- applies to any equity of rectifictation. ie. the lease as rectified or corrected
(Downie v Lockwood)
- covers interest of equitable life estate holder
TEST:
- must have lease;
and
- must be in possession of the land (Burke v Dawes)
*** unregistered leases are VERY well protected ***
2. Easements
as per s.42(2)(d)TLA
- do not have to be registered
Quote:
Under s.42(2)(d) TLA a change in fee simple owner is subject to any easements
howsoever acquired. This is regardless of whether the easement is registered.
Therefore, assuming the Easement is found to be valid, a new fee simple owner of
[estate in question] will not extinguish the Easement and [beneficiary] will be able to
continue to [act easement protects].
3. Adverse Possession
as per s.42(2)(b)TLA
- any rights subsisting from adverse possession are an exception
4. Fraud
as per s.42(1)TLA
Step 1: Against Who?
Fraud must be brought home to the registered proprietor whos title is being
impugned.
Including:
- fraud to procure registered interest
- fraud of an agent of registered interest holder
nb\ agent must be acting in role of agent

41

*** if fraud by agent is to benefit agents own interest, not that of the registered
interest owner, is not valid fraud (Schultz v Corwill) ***
Step 2: What amounts to Fraud?
Quote:
A person acts fraudulently if, in procuring the registration, a person acts dishonestly
in denying another person a proprietary interest (as per s.42 TLA and Assets Co. v
Mere Roihi)
nb\ registering while you know that an unregistered interest exists is not fraud.
TEST:
Must show:
- Knowledge
- Dishonesty
Knowledge
Must have actual knowledge and/or willfull blindness re fraud (Assets Co. v Mere
Roihi)
- must have actual knowledge of fraud (Assets Co. v Mere Roihi)
- incompetence, stupidity is not enough to be fraud (Macquarie Bank v
Sixty-Forth Stone)
- if suspicion was aroused and made you not investigate further, can be
fraud (Assets Co. v Mere Roihi)
- carelessness is not fraud (Assets Co. v Mere Roihi)
Corporations: An individual person must be shown to be dishonest, not the
combined knowledge of various members of a corporation (Macquarie Bank
v Sixty Fourth-Throne).
Dishonesty
Quote:
Fraud means actual fraud, i.e. dishonesty of some sort (Assets Co v Mere Roihi)
there must be a causal link between the fraud and the defrauded party's loss of an
interest in the land (Unic v Quartermain Holdings Pty Ltd endorsing Bank of SA
v Ferguson)
Acting dishonestly can include:
- improper attesting (AGC v De Jager)
- forging signatures etc (Bank of SA v Ferguson)
- assurance given dishonestly* (failure of intent to fulfil a promise) (Loque
v Ports Sweat and Rubber).
* must be assessed at time of registration. Therefore if decision to dishonour
is made after the sale, is not fraud. (Bahr v Nicolay (No. 2))

examples of Fraud in case law overleaf

42

Cases on Fraud:
Loque v Ports Sweat and Rubber
Facts:
Y an RP of 300 acres of land
Loque had an equitable interest over 58 acres of that land
Y entered into contract to sell all land except 58 acres to PSR
But PSRs agent induced Y to transfer all acres by assuring him that the company
would respect Loques interest
PSR ejected Loque from the land
Findings
Assurance given dishonestly, therefore PSR acted fraudulently
Bahr v Nicolay (No. 2)
Facts:
Bahrs were registered proprietors of certain land
Bahrs entered into contract (specifically enforceable agreement providing equitable
interest) to sell land to Nicolay for $32,000 subject to:
Lease back
Right to repurchase land for $45,000
After Nicolay became RP of the land, he sold the land to the Thompsons
Clause 4 of contract of sale between Nicolay and the Thompsons stated:
that the Purchaser acknowledges that an agreement exists between Walter Bahr and
Joanna Maria Bahr and Marcus Grenville Nicolay as stamped and signed on 5 March
1980
Thompsons became registered proprietors of the land
Thompsons refused to sell the land back to Bahrs after the Bahrs lease expired
Q: Was Thomsons registered title indefeasible over Bahrs interest?

Findings:
Registration of the transfer of interest would render Bahrs interest useless if the
Thomsons only knew of Bahrs interest (ie would not be an applicable exception)
However, Clause 4, in the context, did more than simply notify of the Thomsons
knowledge
It showed that the sale was made on a common understanding that sale would be back
to Bahrs (Cl 4 effectively an undertaking to sell back to them)
BUT, did Thomsons actions amount to fraud?
No evidence that Thomsons intention beforehand was to dishonour this
undertaking (decision to dishonour only after the sale)
The difference between this and Loque
Therefore, not fraud under s42 (which says fraud must be in procuring
registration, not after)
Later fraud not ground for indefeasibility

AGC v De Jager
De Jagers signature had been forged on mortgage
AGC lodged a mortgage instrument for registration though it had (through its
employee) actual knowledge that the instrument had been improperly attested.
Signature not witnessed; employee knew this and understood importance of
witness
Lodgment of instrument by AGC constituted a misrepresentation to the Registrar
which in the circumstances was fraudulent.
Were representing falsely that document was properly executed
Therefore, registered mortgage defeasible by de Jager
Russo v Bendigo Bank Ltd

43

Law clerk employed by banks solicitor attested mortgagors signature though she
hadnt seen the mortgage instrument being signed.
Law clerk was too inexperienced to understand that attestation was more than a mere
formality but rather a vital step in process of putting the mortgage on the path to
registration.
No fraud by law clerk because no personal dishonesty on her part
Solicitor did not have knowledge of forged signature or false attestation
No fraud by solicitor because no personal dishonesty on his part
Bank of South Australia v Ferguson (HCA)
Facts:
Ferguson applied for a loan from the Bank of SA
Bank manager forged Mr Fergusons signature on an internal bank form which was
part of the documentation upon which the Bank granted Mr Fergusons application
for a business loan secured by a registered mortgage over his land.
Mr Ferguson defaulted on loan repayments and Bank tried to enforce registered
mortgage.
Mr Ferguson argued that the Banks mortgage was defeasible for fraud.
Findings:
[F]or fraud to be operative, it must operate on the mind of the person said to have
been defrauded and to have induced detrimental action by that person.
This was not the case with [the internal bank form bearing the forged signature]
There must be a causal link between fraud and the defrauded partys loss of
an interest in the land
5. In Personam Exception
Quote:
The concept of indefeasibility does not affect the personal obligations of a registered interest
holder (Frazer v Walker). This means that a registered interest holder cannot rely on
registration to get out of their personal obligations. The in personam exception can only be
relied upon by a person with a recognised legal or equitable cause of action against the
registered interest holder (Macquarie Bank v Sixty-Fouth Stone)
Step 1: check that person relying on In Personam exception has an equitable or legal
right.
Step 2: Two Categories for exception:
- Registered proprietor has entered into a transaction giving rise to an obligation
- Registered proprietor has created an obligation by words or conduct
Registered proprietor has entered into a contract giving rise to an obligation
Registration cannot be used to cancel a contract.
transaction must give rise to obligation:
- on contracts terms
- by operation of law
eg. contract to sell the fee simple
Case example:
Bahr v Nicolay
Facts:
- The contract between Nicolay and Thompsons stated that
the Purchaser acknowledges that an agreement exists
between Walter Bahr and Joanna Maria Bahr and Marcus
Grenville Nicolay as stamped and signed on 5 March 1980

44

Findings:
- Because the Thompsons had taken transfer of the title to the
land on the basis that they would be bound by the equitable
interest of the Bahrs, the Thompsons became subject to a
constructive trust in favour of the Bahrs.
-

ie they honestly intended to sell back to the Bahrs (unlike in


Loque)
Constructive trust gave rise to obligations to perform
Failure to perform these obligations invoked the in personam
exception

Registered proprietor has created an obligation by words or conduct


Examples of causes of action which may allow in personam exception to be
invoked incl:
- Duress
- Estoppel
- Undue influence
- Unconscionable dealing (Amadio)
All less than fraud
NOT negligence, which gives rise to damages but NOT defeasibility of title
(Pyramid v Scorpion)
Limitation of In Personam
Macquarie Bank v Sixty-Fourth Throne
to recognise a claim in personam against a registered mortgage holder, who knew of the
receipt of trust property, would introduce a back door means of undermining the
doctrine of indefeasibility
just because a party knows of another interest doesnt mean they should forego their
registered interest where it has been honestly obtained
cannot treat as liable a mortgage holder over property subject to a trust, who has
honestly obtained registration of the mortgage
no equitable action against MB
Barnes v Addy (1874) LR 9 Ch App 244 per Lord Selborne LC
[Third parties] are not to be made constructive trustees merely because they act as the agents
of trustees in transactions within their legal powers, transactions, perhaps of which a Court of
Equity may disapprove,
unless those agents receive and become chargeable with some part of the trust
property [referred to as the first limb of Barnes v Addy], or
unless they assist with knowledge in a dishonest and fraudulent design on the part of
the trustees [referred to as the second limb of Barnes v Addy]

45

Indefeasibility: Volunteers and Overriding legislation


Volunteers:
A person who is not a purchaser for value.
Quote:
Case law is unclear as to whether a volunteer obtains the protection of the principle of
indefeasibility upon registration. In King v Smail, it was found that they do not, and that they
instead take on the interests which bound their predecessor in title. However, Bogdanovic v
Koteff indicates that volunteers do receive the protection of indefeasibility. The High Court
approach is unclear, however in obiter in Farah Construction v Say-Dee the High Court
indicated that registered volunteers are likely to get the full benefit of indefeasibility.
The law is therefore uncertain, and will depend if the High Court chooses to endorse the
obiter from Farah Constructions. It is most likely that the court would follow this obiter, and
we can therefore assume that a volunteer will be granted the full protection of indefeasibility.
Overriding Legislation
If Victorian legislation post-dating TLA is inconsistent with TLA, then the later Act
prevails to the extent of the inconsistency.
Constitutionally valid Commonwealth legislation prevails over TLA to the extent of
any inconsistency (s109 Commonwealth Constitution)

1. Determining Inconsistency: The (Old) Purposive Approach


If the later enactment contains clear language from which it is plain that its provisions
were intended to apply to land under the [Torrens system] and to apply in a manner
inconsistent with [the relevant Torrens statute], then they must operate according to their
meaning (South-Eastern Drainage Board case 1939 HCA per Dixon J).
So, determine whether later Victorian statute overrides the TLA by asking:
Was later Act intended to apply to Torrens land?
If yes, was later Act intended to operate in a manner inconsistent with the TLA?
If yes again, then later Act overrides previous legislation
2. Determining Inconsistency: The New Emphasis (preferred approach)
There is a strong presumption that Parliament does not intend to contradict itself but
rather intends both relevant Acts to operate within their given spheres (Horvath v
Commonwealth Bank of Australia per Ormiston JA)
Horvath v Commonwealth Bank of Australia
Minor and parents bought land together and gave CBA registered mortgage over land
as security for a loan made to them by CBA.
Supreme Court Act 1986, s49:
The following contracts entered into by a minor are void(a) contracts for the repayment of money lent or to be lent;
- made void unregistered mortgages, but mortgage had been registered
- said nothing about use of void instrument to register interest
- therefore, registration still valid
Minor argued that mortgage was unenforceable against him because he was entitled
to relief under s49(a) (ie mortgage void), and that s49(a) overrode indefeasibility
provisions of TLA
Held: if attempt is made to read the two statutes together, then the later relief
provision may be seen as confined to controlling in the relevant manner the
contractual rights of the parties, and the indefeasibility provisions of the earlier Act
may likewise be confined to the consequences of registration of instruments under the
Act

46

Conflicts Between Unregistered Interests


When there are two interests that are compatible, which will prevail?
Step 1: What do parties think their rights / interests are?
- assess on facts
Step 2: Have they actually got these interests?
- assess as per interest
Step 3: Whos interest will prevail?
- look for Caveats and Notice to assess this.
Caveat Provision:
Quote:
Under s.89(1)TLA, a person claiming an unregistered interest can lodge a caveat forbidding
the registration of any interest that goes against their interest (ie that protected by the
caveat).
*** Registering a caveat does not = registration. it does not even = an interest ***
-

a caveat cannot prevent the registration of instruments lodged before the lodgement
of the caveat (s.91(2)TLA)
a caveat may be withdrawn by the caveator (s.89(1)TLA)
a person affected by a caveat may apply to the registrar to require the caveator to
either commence proceedings to establish the interest by a specified date, or have
the caveat lapse (s.89A TLA)
an affected person may bring court proceedings against caveator for removal of
caveat (s.90(3)TLA)

nb\ Unless one of the above is undertaken, the caveat will remain until a registration is
denied due to it, thus triggering the confrontation between caveator and registor.
Process once a caveat is triggered
Outlined in ss.90(1) & (2)TLA, including:
30 days to appear before the court to establish that a caveatable
interest exists
if proven, court may resolve priority dispute
nb\ better chance of caveator winning if dispute is pre-registration
- if caveator fails or 30 days lapse, caveat is cancelled to extent that it clashes
with registered interest (s.90(1)TLA)
What is a caveatable interest?
- any estate or interest in land (s.99(1)TLA)
- only proprietary interests are caveatable (Swanston Mortgages)
- therefore a licence is not caveatable
- cannot caveat to protect a registered interest, but can caveat to protect any
proprietary interest that goes beyond the registered title (Swanson Mortgages)
- the equity of a mortgagor whos interest has been sold incorrectly be protected be
a caveat (Swanston Mortgages)
*** As long as you honestly believe, on reasonable grounds that you have an interest,
even if you dont, you can put on a caveat. (s.118 TPA) ***
Requirements for a valid caveat:
Caveat must:
- be in the approved form
- describe the nature and value of the estate / interest claimed

47

- contain a description of the land


- include the facts on which the claim is based
- not be in terms wider than necessary o protect the caveators interest
nb\ must be specific re what type of interest is claimed etc.
Notice
Quote:
s.199 (3) PLA restricts where notice is applicable
A purchaser can only be prejudiced against by notice if:
TEST (s.199(1) PLA):
(a) purchaser has either actual or constructive notice
or
(b) if, in the same transaction it has come to the knowledge of his agent (actual or
constructive), when acting as agent (ie. implied notice)
Constructive Notice:
Examples of what is constructive notice:
- if vendor, when asked, cannot produce certificate of title.
- if you search the relevant folio to obtain info which wouldnt appear on the title, you
have constructive notice of caveats etc
- inspect the land, is constructive notice of who / what is there (Platzer v CBA)

48

Priority Rules
Prior Equitable interest vs. Subsequent full interest
The subsequent full equitable interest will prevail, provided that they are :
TEST (from La Tech Investments):
- a bona fide purchaser for value of the full equitable interest
and
- they are without notice of prior interest
Disputes between 2 full equitable interests
Quote:
Heid v Reliance Finance indicates that provided the party who gained the interest first has
acted blamelessly in their conduct, the earlier interest will be successful.
-

if first party is not blameless, but second party has been worse, earlier wins (Heid v
Reliance Finance)

Two types of scenarios where a dispute between two full equitable interests occurs:
1. Registered Proprietor arms a party with the means to become registered and the new
Registered Proprietor creates an interest in land in a third party
2. Registered Proprietor creates two inconsistent unregistered interests (ie contracts with
two different parties).
1. Arming behaviour
where the registered proprietor unintentionally acts to arm the second registered
proprietor with the means to register a third party.
Abigail v Lapin
Facts:
- Lapins were RP of two fee simples
- Lapins executed a transfer to a lady named Havana for both properties by way of
sale; also changed certificate of title
Was only a security interest though, but Havana sold to Abigail
- Lapins had full equitable interest to set aside transfer for fraud
- Abigail had full equitable mortgage interest
- Lapins were first in time, but did they have prevailing interest?
Findings:
- Lapins armed Havana with means to deal with property
- Thus they had contributed to their situation
- Abigail had no reason to search the register, and if they had would have found
that Havana was the fee simply owner anyway
- Abigail prevails
Lapins should have lodged a caveat neutralising their arming conduct
*** Assess for who is at fault, then run tests from Heid v Reliance Finance ***
2. inconsistent unregistered interests
where the registered proprietor vests more than one party with a fully equitable
unregistered interest.
Always look / assess for:
- estoppel
- notice
- negligence
- merit

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J & H Just Holdings v Bank of NSW (HCA)


Facts:
- Josephson was RP of fee simple in land
- Josephson gave Bank of NSW executed memorandum of mortgage in registrable
form + Cert of Title as security for loan equitable mortgage (Caveat not
lodged)
Bank had held onto CT so had protected itself from inconsistent dealings /
other interests
- Josephson gave Just Holdings an equitable mortgage (False explanation for
whereabouts of CT)
Had said he left CT with the Bank
JH didnt explore
- Just Holdings lodged caveat to protect equitable mortgage
Issue: Which mortgage had priority?
- Primary purpose of caveat is not to give notice of interest so that a subsequent
person cannot infer from absence of caveat that there is no other interest
So if you dont lodge a caveat, that alone does not postpone other interests
- Caveat has effect of giving notice, but not its purpose
- Bank won, so got first go at realising security interest, and if sale of proceeds
doesnt cover both mortgages, then J&H will have to seek compensation
nb\ if you did not caveat due to trust (family etc) is a strong argument against need to
caveat, as per Platt Nominees
Other possible priority disputes
Prior unregistered legal interest vs. subsequent unregistered legeal interest or
equitable interest:
- prior interest holder prevails unless prior interest holders fraud, negligence
or arming conduct led to the creation of the subsequent interest
nb/ unregistered legal intersest = unregistered lease, easement by prescription etc
Prior equitable interest vs. subsequent unregistered legal interst:
subsequent interest prevails, provided:
they are bona fide purchaser for value
- without notice of prior interest (La Tech)

50

Co-Ownership
Exists when more than one person has the same right in the same object at the same time.
Step 1:
What sort of co-ownership?
Two types of co-ownership:
- joint tenancies
- tenancies in common.
Joint Tenancy
Each joint tenant owns the whole of the subject matter of the joint tenancy rather than just a
share in it.
eg. The Hellfish agreement from the Simpsons
Essential characteristics:
- the four unitites
and
- survivorship
The Four Unities
1. Unity of possession
2. Unity of interest
3. Unity of title
4. Unity of time
1. Unity of Possession:
co-owners simultaneously have the same right over the land (cannot be
divided)
- If estate in land, each co-owner has right to possession of whole land
- Holders collectively hold an easement, mortgage etc
2. Unity of Interest:
co-owners interests are same in nature, extent and duration.
- No unity where grant given to A for 50 years (leasehold estate), and B for
life (freehold estate) and different I duration
3. Unity of Title:
co-owners interests acquired under the same document or act
eg adverse possession, registered interest, equitable interest?
4. Unity of Time:
co-owners interests vested at the same time
Right of Survivorship
Upon the death of a joint tenant, the interest of that joint tenant passes by the
right of survivorship to the remaining joint tenants (Re Robertson)
-

Final survivor becomes the sole owner, at which time their title can be
registered or passed on by will
A gamble, but a simple way of ensuring your partner becomes the registered
owner of property if you die
Complications to Right of Survivorship
Can a corporation be a joint tenant?
- YES (s28PLA)

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dissolution of corporation considered same as person dying (s28(2)PLA)

Who died first?


- Where it is uncertain who died first, death is presumed to have occurred
in order of seniority (s184 PLA)
ie oldest died first
- This presumption can be rebutted based on evidence
Amending the Torrens register
- Last surviving joint tenant can be registered (s50TLA)
Tenancy in Common
Where there are two or more people simultaneously in possession of the whole land, and
yet they are not Joint Tenants
-

Each tenant in common has a distinct, but undivided share


ie may have 1/3 share, but cant point to the physical portion of land which corresponds
to their share
Tenants in common often take in different proportions
Tenants in common have identical rights to possession of the whole property
ie unity of possession
The other three of the Four Unities do not have to be present
Although it is possible to have all four unities, but still not be JTs (if there is no right of
survivorship)
*** must assess for legal title (step 2) and in equity (step 3) separately ***

Step 2:
How do you tell the difference between JT and TIC at COMMON LAW?
Joint Tenancy or Tenants in Common? Position at Common Law
Possible Scenarios for determining LEGAL TITLE:
a)
Grant instrument specifies type of co-ownership
b)
Grant instrument does not specify type of co-ownership
c)
Registration of a type of co-ownership which specifies type
d)
Registration of an instrument which does not specify type
a) The Grant Instrument Specifies Type of Co-ownership
Tenancy in Common
TEST:
- Unity of possession
and
- Express statement that grantors take as tenants in common
Joint Tenancy
TEST:
- Express statement that grantors take as joint tenants
and
- all 4 unities
without
- words of severance
Words of severance:
Words that indicate a tenancy in common

52

Usually to do with outlining shares etc.


For example:
- To Martha, Luke and John equally
- To Martha, Luke and John in equal shares
- To Martha, Luke and John to share and share alike
- To Martha in the proportion of a share and to Luke in the proportion of a
share
To resolve conflict between an express statement that co-owners take as joint
tenants and the use of words of severance look at whole context of grant to seek
intention
b) The Grant Instrument Does Not Specify the Type of Co-ownership
No express statement that grantors take as tenants in common or joint tenants
Joint Tenancy is assumed, except where:
TEST:
- One or more of the four unities is absent
or
- Words of severance are used
or
- Evident intention that grantors take as tenants in common intention (not easy to
show)
c) Registration of an instrument which specifies the type of co-ownership
-

Registered proprietors hold legal interest in whatever way the Register says
they do

but
- what Register says depends on how co-ownership is described on instrument
lodged for registration
TLA s30(2):
Two or more persons who are registered as joint proprietors of land shall be
deemed to be entitled thereto as joint tenants
and
Registrar may provide multiple certificates or only one, so whoever takes it must
provide access to it for other JTs
d) Registration of an instrument which doesnt specify type of co-ownership
s33 TLA:
Joint Tenancy is assumed, except where:
TEST:
- One or more of the four unities is absent
or
- Words of severance are used
or
- evidence indicates that grantees take as tenants in common
Step 3:
How do you tell the difference between JT and TIC in EQUITY?
Joint Tenancy or Tenants in Common? Position in Equity

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Step 3(a):
Check the position at law and work out what this means for equity
Tenants in common at law
= presumed tenancy in common in equity
Joint tenants at law
will be presumed tenancy in common in equity where:
- Unequal contributions to purchase price are made (or as outlined below)
but
- presumption can rebutted by:
evidence of actual common intention of contributors
or
- presumption of advancement (see below)
Presumption of advancement:
Where relationship between close relatives presumes a gift
- Remains a joint tenancy in equity unless rebutted by evidence of
common intention to be tenants in common.
eg: Mother pays for all of title, but gets it registered for her and her child, 6040 proportions. Benefit goes to child as gift. Stays a joint tenancy (pending
rebuttal)
NB: tenancy in common will be presumed for the following:
Mortgagees
Equity presumes that the parties intended the security interest to be in
accordance with their contributions
It cannot be the intention that a mortgage survive, so the mortgagor intends to
lend his own and take back his own (Morley v Bird)
Rebutted by evidence that the parties to hold a JT in law and equity
if equal contribution JT is presumed, but can be rebutted by evidence
of actual tenancy in common (re Jackson)
Business Partners
Unfair for right of survivorship to operate as the business partner who died
first would lose his investment
get equity in proportion to amount put in (Lake v Craddock)
Even if 50/50 contributions, still considered tenants in common
Presumption less likely if BPs are married
Note flexible approach in Malayan Credit v Jack Chia
Focus on probably intention
In this case: probable intention determined by proportion of rent each tenant
in the office block paid
*** Where there is a joint tenancy at law, but tenants in common at equity, that
equity determines how the land is used and enjoyed ***

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Step 4:
Assess the rights and obligations of co-owners
Rights & Obligations of Co-owners
Includes:
a) right to possession
b) occupation and rent
c) liability for profits
d) repairs and improvements
e) damage to co-owned land
*** an agreement between the co-owners will override the rights and obligations ***
a) Right to possession
Unity of possession:
- Each co-owner can occupy, use and enjoy each and every part of co-owned land
- Cannot prevent other co-owners from doing same
Excluded or ousted (wrongfully excluded) co-owner may:
- Bring action for recovery of land and mesne profits (compensation)
- Sue ousting co-owner in trespass
b) Occupation Rent
s233(3) PLA:
VCAT must not make an order requiring a co-owner to pay rent to a co-owner unless:
- the co-owner who has occupied the land is seeking compensation, reimbursement or
an accounting for money expended by the co-owner who has occupied the land in
relation to the land (s233(3)(a) PLA)
or
- the co-owner claiming an amount equivalent to rent has been excluded from
occupation of the land (s233(3)(b) PLA)
or
- the co-owner claiming an amount equivalent to rent has suffered a detriment because
it was not practicable for that co-owner to occupy the land with the other co-owner
(ie relationship breakdown) (s233(3)(c) PLA)
eg. breakdown of relationship so choose to move out etc.
c) Liability for Profits
s28A PLA:
- A co-owner is liable to, in respect of the receipt by him or her of more than his or her
just or proportionate share according to his or her interest in the property, to
account to any other co-owner of the property. (s28A(1) PLA)
- applies to joint tenants s and tenants in common (s28A(2) PLA)
nb: Henderson v Easton indicates that this probably only refers to things like rent etc,
not things like profits from crops etc as per 1705 Statute of Anne
d) Repairs and Improvements
- Co-owner has right to make repairs and improvements
- co-owners not obliged to share the cost (unless otherwise agreed)
However
- per Brickwood v Young the making of permanent improvements to the land by a
co-owner

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gives rise to an equity attaching to the land, analogous to an equitable


charge
but enforceable only in the event of a partition (ie dividing of land) or a
distribution of the value of the land amongst the co-owners (ie not
enforceable on foot)
which runs with the land in favour of successors in title of the original holder
value = the lesser of the amount actually spend or the amount other coowners value was improved

e) Damage to Co-owned Land


- Co-owner does not have an entitlement to destroy or substantially damage coowned land
- Doctrine of voluntary waste applies between co-owners (Ferguson v Miller)
Voluntary Waste:
a positive act causing injury to land
eg. destroying buildings; chopping down trees etc.
- life tenant is liable to damages to holder of future interest unless grant makes
him unimpeachable for waste (s132A PLA)

56

Step 5:
How may a co-owner deal with their interest?
Dealing with Interest
- A co-owner has a right to deal with his or her own interest in the land, but not with the
interest of other co-owners
- If they purport to deal with others interest, then co-owners have to apply priority rules
Different Ways Co-Owners can Deal with their interest:
- Transfer of interest
- Encumbrance of interest
Transfer of interest
Option 1:
A, B, C are tenants in common
A can transfer his share to D by sale,
so that B, C, D are now tenants in common
Sale effectively severs As interest, and replaces it with Ds interest
Option 2:
A, B, C are Joint Tenants
A can transfer his share to D by sale
So D becomes tenant in common, and B and C remain joint tenants
o Cannot transfer JT to someone else unless the sole remaining JT
Encumbrance of Interest
Co owner may encumber their interest by granting a lesser interest out of it
Encumbrance may sever or suspend a joint tenancy
Unless joint tenancy has been severed or suspended prior to death, encumbrance is
extinguished on granting joint tenants death
Encumbrance granted by tenant in common: death of grantor does not affect
encumbrance (so lease continues)
Eg grant of lease, grant of license
Grant of lease
Co-owner becomes lessor
Lessee gets granting co-owners right to possession for duration of the lease
Can lessee exclude granting co-owner?
Yes; has right of exclusive possession
Can lessee exclude non-granting co-owners?
No.
Grant of license
Non-granting co-owner can terminate a bare licence which goes beyond what is
reasonable and incidental to their own possession and which interferes with coowners (State of New South Wales v Koumdjiev)
a licence granted by all must be revoked by all (Pitt v Baxter)
State of New South Wales v Koumdjiev:
One tenant in common had allowed police into the apartment foyer
Buzzing them in constituted a bare licence
K, another a co-owner, told the Police to go away
Revocation deemed valid
White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd & 2 ors

57

Applied principle on above case to a contractual licence


Step 6):
How can a co-owner sever a joint tenancy?
Severance of Joint Tenancy: Transfer of interest
Converting Joint Tenancy to tenancy in common
Means of severance:
1. By sale / alienation
ie dealing with own interest where other co-owners dont agree
2. By formation of mutual intention
ie a gift etc
3. mutual transfers
4. transfer to self
5. Grant by Joint Tenant of Fee Simple of Less than Full Interest
6. Severance by Mutual Intention
7. Adverse Possession between Co-owners
1. Sale of Joint Tenancy
A, B, C Joint Tenants
A can sell his JT to D, who becomes a tenant in common
So only B and C are joint tenants (D has no unity of title with them)

If there is severance at law, there is also severance at equity


But it is possible to have severance at equity, but not at law (ie legal title removed)

2. Gift (Corin v Patton)


Facts:
o Mr and Mrs Patton were registered joint tenants
o Had a very unhappy relationship
o Mrs Patton was going to die, and didnt want her husband to have right of
survivorship
o She planned to transfer interest to her brother (Mr Corin)
o JT severed at law once this transfer registered
o But also wanted to be beneficial owner, so asked brother to declare himself
trustee of share for her
o Mrs Patton died before executing the plan
o Transfer had been executed to Mr Corin and he had declared himself trustee
for her
o But solicitor had not yet registered the transfer
o So Mr Corin had no LEGAL INTEREST (no legal severance)
o The gift was complete in law, but what about in EQUITY?
o Had there been severance in equity?
o If gift complete in equity before death, then Mr P would have been sole
owner at law, but would have held legal title on trust for himself and Mr
Corin in tenants in common at equity
So Corin took trust of Mrs Pattons share (as passed on in her will)
Findings (Mason & McKew):
o On the facts, Mrs P had not done everything she should have
o Did not authorise the production of title at LTO
o Therefore, no severance of JT at equity prior to her death
o Mr Patton the sole owner in law and at equity
o Deane:

58

o
o
o

Agreed that the Joint Tenants share of joint tenancy not severed in equity
TEST: Has donor done all that is necessary to place the vesting of the legal
title in control of donee and beyond reach of donor?
Once this standard is reached and gift complete at equity, the donee is bound
in conscience to hold property as trustee for donor, pending vesting in legal
title

3. Mutual Transfers (eg Wright v Gibbons)


Where A and B wish to remove JT arrangement with C:
o A can transfer to B so that B is tenant in common, and maintains JT with C
o B can then transfer back to A so that now there are only tenants in common
o This mutual transfer between A and B can occur in one step
4. Transfer to Self
S72(3) PLA allows a person to transfer an interest to themselves so that they are out
of JT, while others remain JTs
A much better way to severe JT
Only works once transfer is registered
o Then there is severance in law and equity
o But cannot have severance in equity alone with this option
o Otherwise person could have equity but wait out the JT to see if they are the
last one standing
5. Grant by Joint Tenant of Fee Simple of Less than Full Interest
What about:
Grant of life estate?
JTs share is severed from JT
Grantee holds life estate as tenant in common, but is severed from rest of fee simple

Grant of lease?
Joint tenancy of fee simple is suspended for duration of the lease
Lessee (grantee) holds leasehold as tenant in common with non-grantors
Lessor (grantor) holds reversion as joint tenant with non-grantors
Note: lease is not extinguished upon death of grantor; only the leasehold
reversion
Frieze v Unger

o Grant of Mortgage
o

No severance of joint tenants share


Lyons v Lyons

6. Severance by Mutual Intention


Mutual intention indicated by:
Agreement
Lyons v Lyons:
Agreement will not amount to severance unless it is a specifically
enforceable contract to severe
However, the better view is in Public Trustee v. Pfeiffle:
Evidence that all the parties intended that from the time of their
agreement the substance of their relationship would be that of tenants
in common
Just needs to be evidence that parties were of one mind

59

Need not be specifically enforceable contract

Course of dealing (Williams v. Hensman)


Sufficient to show the interests of all were mutually treated as constituting a
tenancy in common

Once one of these has occurred, it is too late for a co-owner to change their mind!
7. Adverse Possession between Co-owners
Paradise Beach Transportation & Co Ltd v Price & Robbins
o 7 people were teants in common
o 2 of them farmed the land for their own benefit; the other 5 didnt exercise right to
possession
o Right of the 5 to recover land extinguished by s14(4) of Limitations Act
o Right of co-owners extinguished if other co-owners have possessed all or
great proportion of land than entitled for the period of time creating adverse
possession
o Vic equivalent case is Beaumont v Hodgkins
Step 7:
How can a co-ownership be terminated?
Termination of Co-ownership
Either tenancy in common or joint tenancy terminates when:
- all but one of the joint tenants has died.
- if one co-owner extinguishes the interests of all the other co-owners by adverse
possession.
- if one of the co-owners purchases or otherwise acquires the interests of all the other
co-owners.
- if the co-owners all join together and sell or otherwise transfer their interests to a third
party.
- if all the co-owners by agreement physically divide the co-owned land amongst
themselves.
Would deny notion that co-owners must be in possession of whole land
- by obtaining an order for sale or division of the co-owned land from a court or
tribunal pursuant to powers granted by Part IV of the Property Law Act or other
statutory provisions.
Partition and Sale Orders

Jurisdiction of VCAT

Excludes PLA Part IX (and, of course, Family Law Act)

Testator family maintenance claims

Partnership Act 1958 proceedings

VCAT more simple/cheap, but can refer to SC if needed

Application for sale of property and/or division of proceeds or physical division of both
(PLA s 225)

Flexible remedies more than there used to be (PLA s 228)


Allows VCAT to make any order is sees fit to ensure justice occurs

Sale and division of the proceeds the primary remedy (PLA s 229)

60