Contents
Nature of Land (Topic 2) .......................................................................................................................... 8
The Broad Meaning of “Land” in Written Law ....................................................................................................................... 8
Subsoil ............................................................................................................................................................. 8
1. Trespass to Land ............................................................................................................................................................. 8
2. Subsoil and Common Law .............................................................................................................................................. 8
Separate Ownership: ............................................................................................................................................................. 8
Petroleum .............................................................................................................................................................................. 9
Airspace ........................................................................................................................................................... 9
1. Can airspace be regarded in its own right as “land” which can be dealt with separate from the soil? ............................ 9
2. Does the owner of the lands surface have a sufficient proprietary interest in the airspace above the land to ground an
action for trespass or nuisance in tort? .............................................................................................................................. 9
The Lateral Boundaries to Land ....................................................................................................................... 10
1. Natural vs Artificial Boundaries .................................................................................................................................... 10
Title boundaries: .................................................................................................................................................................. 10
2. Doctrine of Accretion ................................................................................................................................................... 10
3. Requirements of the Doctrine of Accretion .................................................................................................................. 11
3. Rights in Water and Irrigation Act 1914 (WA) ............................................................................................................... 11
Fixtures .......................................................................................................................................................... 12
1. The Doctrine of Fixtures ............................................................................................................................................... 12
2. Chattels v Fixtures ........................................................................................................................................................ 12
3. Common Law Test ........................................................................................................................................................ 12
4. Degree of Annexation Test ........................................................................................................................................... 13
5. Purpose/Object of Annexation test .............................................................................................................................. 13
Other Relevant Considerations Include in Annexation Tests ............................................................................................... 16
Fixtures, Encroachments, Fencing ................................................................................................................... 17
1. “Exceptions” to the Law of Fixtures .............................................................................................................................. 17
Tenants’ Fixtures at Common Law ....................................................................................................................................... 17
Removal of Tenant’s Fixtures after Expiration of the Lease ................................................................................................. 17
Removal by a Defaulting Tenant Permitted.......................................................................................................................... 18
Damage by Removal Must be made Good by a Tenant ....................................................................................................... 18
Rule on Tenants’ Fixtures ..................................................................................................................................................... 18
Agricultural Fixtures ............................................................................................................................................................. 18
Residential Tenancies Act 1987 (WA) ................................................................................................................................... 19
Goods Belonging to a Third Party ........................................................................................................................................ 19
Statutory Regime Prior to PPSA ........................................................................................................................................... 19
Chattel Securities Act 1987 (WA) s6  Fixtures .................................................................................................................. 20
Personal Properties Securities (Commonwealth Laws) Act 2011 (WA) ............................................................................... 20
Removal Against a Mortgagee ............................................................................................................................................. 21
1
2. The Doctrine of Accession ............................................................................................................................................ 21
3. The Doctrine of Intermixture ........................................................................................................................................ 21
4. The Law of Encroachments ........................................................................................................................................... 21
Buildings Erected under the Mistake of Title ....................................................................................................................... 21
Encroachment of Buildings onto Adjoining Land ................................................................................................................. 22
S122 of the PLA .................................................................................................................................................................... 22
6. Crops and Trees ............................................................................................................................................................ 24
Tenure And Estates (Topic 3) ................................................................................................................. 25
The Doctrine of Tenure ................................................................................................................................... 25
1. The Mode of Holding or Occupying Land ...................................................................................................................... 25
2. Shape and Internal Consistency .................................................................................................................................... 25
3. English Legal History ..................................................................................................................................................... 25
4. Reception to Australia .................................................................................................................................................. 25
5. Titles, Rights and Interests ........................................................................................................................................... 25
6. Doctrine of Tenure after Mabo ..................................................................................................................................... 26
Doctrine of Estates ......................................................................................................................................... 26
Estate as Rights to Possession and Enjoyments of the Land ................................................................................................ 26
Classification of Estates .................................................................................................................................. 26
1. Freehold Estates ........................................................................................................................................................... 26
2. Fee-Tail Estate .............................................................................................................................................................. 27
3. Life Estates ................................................................................................................................................................... 27
4. Leasehold Estates ......................................................................................................................................................... 27
5. Leasehold Estate in Equity ............................................................................................................................................ 28
6. Creation and Transfer of Freehold Estates .................................................................................................................... 28
7. Conditional and Determinable Interests ....................................................................................................................... 30
1.
Absolute interests ....................................................................................................................................................... 30
2.
Determinable interests................................................................................................................................................ 30
3.
Conditional interests ................................................................................................................................................... 30
8. Limiting events void by public policy ............................................................................................................................ 31
1.
The condition is conducive to immoral behaviour ...................................................................................................... 31
2.
Condition is void on the grounds of illegality. ............................................................................................................. 32
3.
Void for uncertainty .................................................................................................................................................... 32
4.
Void for unduly restricting the right to marry. ............................................................................................................ 32
5.
A limiting event which substantially restricts the grantee’s right of alienation .......................................................... 33
9. Restraints on Alienation in Practice .............................................................................................................................. 33
Future Interests .............................................................................................................................................. 34
1. Types of Recognized Future Interests ........................................................................................................................... 34
1.
In Possession ............................................................................................................................................................... 34
2.
In Reversion ................................................................................................................................................................. 34
3.
In Remainder ............................................................................................................................................................... 34
2
2. Future Interests and The Common Law ........................................................................................................................ 35
3. Fragmentation between Legal and Beneficial Ownership ............................................................................................. 35
4. Trust ............................................................................................................................................................................. 35
5. Rules Against Perpetuities ............................................................................................................................................ 36
6. Rights of Owners of Freehold Estates ........................................................................................................................... 36
1. Rights and Obligations of Life Estates .............................................................................................................................. 36
2. Doctrine of Waste ............................................................................................................................................................ 36
Native Title (Topic 3.5) .......................................................................................................................... 37
What is Native Title .............................................................................................................................................................. 37
1. Doctrine of Native Title and Tenure .............................................................................................................................. 37
1. Before Mabo v Qld (No 2) (1992) 175 CLR 1 .................................................................................................................... 38
2. After Mabo v Qld (No 2) (1992) 175 CLR 1 ....................................................................................................................... 38
1. Native Title Act ........................................................................................................................................... 38
3 Elements of Statutory Native Title .................................................................................................................................... 38
Elements 1 & 2: Traditional Laws and Customs with Connection to Land or Waters .......................................................... 39
Third Element: Recognition by the Common Law ................................................................................................................ 40
1. Content of Rights Recognised by Native Title ............................................................................................................... 40
Examples of rights that are included in native title ............................................................................................................. 40
2. Extinguishment of Native Title .................................................................................................................... 40
Extinguishment of Native Title under the NTA .................................................................................................................. 41
Legislation after 1 July 1998................................................................................................................................................. 41
Immediate Period Acts ..................................................................................................................................................... 42
Future Act Regime ............................................................................................................................................................... 42
3. Compensation ............................................................................................................................................ 42
Acquisition and Transfer of Proprietary Interests (Topic 4) ..................................................................... 43
1. Legal and Equitable Interests in Land ........................................................................................................... 43
Difference between Legal Interests and Equitable Interests ............................................................................................. 44
Similarities between Legal Interests and Equitable Interests ............................................................................................ 44
2. Sale of Land Contracts................................................................................................................................. 44
Formal Requirements for Contracts for the Sale of an Interest in Land ............................................................................. 44
Applying the Statute of Frauds ............................................................................................................................................ 44
Effect of the Statute of Frauds .......................................................................................................................................... 45
Practical Issues and Consequences ...................................................................................................................................... 46
3. Part Performance and Equitable Estoppel .................................................................................................... 47
Recognition and Treatment of Equitable and Legal Interests ............................................................................................ 47
Doctrine of Part Performance........................................................................................................................................... 48
Elements of the Doctrine of Part Performance .................................................................................................................... 48
Doctrine of Equitable Estoppel ......................................................................................................................................... 50
Six Elements of Equitable Estoppel ...................................................................................................................................... 50
3
Five Requirements for Specific Performance ....................................................................................................................... 50
Practical Strategies ............................................................................................................................................................... 50
4. Statutory Requirements for Legal Interests .................................................................................................. 51
Statutory Requirements for Passing Legal Interest ........................................................................................................... 51
Property Law Act 1969 (WA) ................................................................................................................................................ 51
What is a Deed? ................................................................................................................................................................... 51
Torrens Land......................................................................................................................................................................... 51
5. Equitable Interests and Statutory Requirements .......................................................................................... 51
Statutory Requirements for Passing Equitable Interest in Land ........................................................................................ 51
s34 PLA and s4 Statute of Frauds ......................................................................................................................................... 52
Acquisition of Equitable Interest by way of Constructive Trusts .......................................................................................... 54
The Law on Priorities Between Competing Proprietary Interests (Topic 4.5) ........................................... 55
1. What is a Priorities Dispute .......................................................................................................................................... 55
PRIORITIES – ANSWER GUIDE ......................................................................................................................... 56
2. Three Steps in Resolving a Priorities Dispute ................................................................................................................ 57
3. What is the Outcome of a Priorities Dispute ................................................................................................................. 57
1. Earlier Legal Interests (L1) vs. Later Legal Interests (L2) ................................................................................ 57
Deeds Registration System................................................................................................................................................... 57
2. Earlier Legal Interest (L1) vs. Later Equitable Interest (E2)............................................................................. 58
Relationship of Agency ........................................................................................................................................................ 59
L1 vs E2 overall ................................................................................................................................................................. 61
3. Earlier Equitable Interest (E1) vs. Later Legal Interest (L2) ............................................................................. 61
General Rule ........................................................................................................................................................................ 61
Elements L2 must Prove ................................................................................................................................................... 61
Issues with Constructive Notice ........................................................................................................................................... 62
Occupier in Possession with the Vendor .............................................................................................................................. 63
4. Earlier Equitable Interest (E1) vs. Later Equitable Interest (E2) ...................................................................... 63
Dispute Between Mere Equity and Equitable Interest Mere Equity .................................................................................. 65
Categories of Mere Equities ................................................................................................................................................. 65
Possession and Title (Topic 5) ................................................................................................................ 66
1. Possession (Goods) ..................................................................................................................................... 66
Possession vs. ownership ..................................................................................................................................................... 66
Possession as a Source of Proprietary Interests in Goods ................................................................................................. 66
1. Rights Against Third Parties ............................................................................................................................................. 66
2. Jus Tertii as a Defence ...................................................................................................................................................... 67
3. Possessor Acquires Possession Wrongfully ...................................................................................................................... 67
4. Bailors vs Bailees .............................................................................................................................................................. 67
5. Sales of Goods Act 1895................................................................................................................................................... 69
6. Section 18: Five Rules for Ascertaining Intention ............................................................................................................ 69
4
Establishing Possession: What are some Issues? .............................................................................................................. 70
1. Control ............................................................................................................................................................................. 70
2. Lost Goods vs Abandoned Goods .................................................................................................................................... 71
3. Finder’s rights vs Occupiers Rights ................................................................................................................................... 71
4. Rights and Obligations of the Finder ................................................................................................................................ 72
5. Rights and Obligations of the Occupier............................................................................................................................ 72
6. Prominent Case Law......................................................................................................................................................... 72
Criminal and Found Property Disposal Act 2006 (WA) ...................................................................................................... 73
Regulated properties ........................................................................................................................................................... 73
Unregulated properties........................................................................................................................................................ 73
2. POSSESSION AND TITLE (LAND) ................................................................................................................... 73
1. Possession as a Common Law Source of Property ........................................................................................................ 73
2. Possession as a Source of Proprietary Interest in Land ................................................................................................. 74
3. Possession in Land ........................................................................................................................................................ 74
Two Elements of Possession ................................................................................................................................................ 74
Title to the Land ................................................................................................................................................................... 74
4. Doctrine of Adverse Possession .................................................................................................................................... 76
Necessary Elements and Determinacy of Adverse Possession ............................................................................................ 76
Basic Principles as per Murray J ........................................................................................................................................... 76
Other things to note with adverse possession: ................................................................................................................... 77
The Implied License Doctrine ........................................................................................................................................... 77
Whittlesea CC v Abbatangelo principles on practical points................................................................................................ 78
When Adverse Possession has run its Course ...................................................................................................................... 78
5. Statutory Provisions in WA ........................................................................................................................................... 79
Relevant Provisions within the Transfer of Land Act (TLA)................................................................................................... 79
Relevant Provisions within the Limitations Act .................................................................................................................... 80
Common Arguments Against Adverse Possession ............................................................................................................... 80
6. Concluding Adverse Possession .................................................................................................................................... 81
Co-Ownership Answer Guide .......................................................................................................................... 82
Element 1: Focus of Answer ................................................................................................................................................. 82
Element 2: State the Parties and Their Rights If Given ........................................................................................................ 82
Element 3: Determine the Type of Co-Ownership: .............................................................................................................. 82
Element 4: The creation of Co-Ownership ........................................................................................................................... 82
Element 5: Rights and Obligations between Co-owners ...................................................................................................... 82
Element 6: Termination of Co-Ownership............................................................................................................................ 82
Co-Ownership (Topic 6) ......................................................................................................................... 83
Co-Ownership Introduction ................................................................................................................................................. 83
1. Joint Tenancy .............................................................................................................................................. 83
1. Four Unities .................................................................................................................................................................. 83
1.
Unity of possession ..................................................................................................................................................... 83
5
2.
Unity of interest .......................................................................................................................................................... 83
3.
Unity of time ............................................................................................................................................................... 83
4.
Unity of title ................................................................................................................................................................ 83
2. Right of Survivorship (jus accrescendi) ......................................................................................................................... 84
Order of death ..................................................................................................................................................................... 84
Companies ........................................................................................................................................................................... 84
2. Tenancy in Common ................................................................................................................................... 84
1. Creation of Co-Ownership ............................................................................................................................................ 85
2. Creation of Co-Ownership: Co-ownership at Law ......................................................................................................... 85
Words of severance ............................................................................................................................................................. 85
Torrens Title Land and the Registration of Co-owners ......................................................................................................... 86
3. Creation of Co-ownership: Co-ownership at Equity ...................................................................................................... 86
First category for presumption of tenants in common ........................................................................................................ 86
Second category for presumption of tenants in common ................................................................................................... 87
Third category for presumption of tenants in common ....................................................................................................... 88
Fourth category for presumption of tenants in common .................................................................................................... 88
Considerations Overall ......................................................................................................................................................... 89
Co-Ownerships’ Rights and Enjoyment (Topic 6.2) ................................................................................. 89
1. Occupation Rent ......................................................................................................................................... 89
1. Right to Occupation ...................................................................................................................................................... 89
2. Exceptions to Right to Occupation ................................................................................................................................ 89
3. Test for Ouster .............................................................................................................................................................. 89
4. Determining Occupation Rent ...................................................................................................................................... 90
5. Compensation for repairs and improvements to land by one co-owner ....................................................................... 90
2. Right to Rent and Profits ............................................................................................................................. 91
1. Limitations to Stature of Anne 1705 ............................................................................................................................. 91
2. Equity and the Rights to Rent and Profits ..................................................................................................................... 91
3. Disposition of Interest by Co-owners ........................................................................................................... 92
4. Liability for Waste, Trespass and Obstruction of Use .................................................................................... 92
Termination of Joint Tenancy (Topic 6.3) ................................................................................................ 92
1. Methods for Termination of Joint Tenancy ................................................................................................................... 92
1. Severance by a Joint Tenant Acting on his/her Share. ..................................................................................................... 93
2. Partial Alienation .............................................................................................................................................................. 94
3. Severance of Joint Tenancy by Mutual Agreement .......................................................................................................... 94
Severance by Course of Dealings ......................................................................................................................................... 94
5. Severance by Merger ....................................................................................................................................................... 95
6. Severance by Bankruptcy ................................................................................................................................................. 95
7. Severance by Court Order ................................................................................................................................................ 95
2. Termination of Co-Ownership....................................................................................................................................... 95
6
Section 126 of PLA 1969 (WA) ............................................................................................................................................. 95
Section 127 of PLA 1969 (WA) ............................................................................................................................................. 96
3. Contractual Restraints on Sale or Partitions ................................................................................................................. 96
S129 PLA – Power of the Supreme Court ............................................................................................................................. 96
7
Nature of Land (Topic 2)
The Broad Meaning of “Land” in Written Law
ACTS INTERPRETATION ACT 1901 (Cth) - SECT 2B
"land " includes messages, tenements and hereditaments, corporeal and incorporeal, of any tenure or description, whatever
may be the estate or interest in them.
INTERPRETATION ACT 1984 (WA) - SECT 5
“Land” includes buildings and other structures, land covered with water, and any estate, interest, easement, servitude or right in
or over land;
Cujus est solum ejus est usque ad coelom et ad inferos: Whoever's is the soil, it is theirs all the way to Heaven and all the way
to Hell, is a principle of property law, stating that property holders have rights not only to the plot of land itself, but also the air
above and (in the broader formulation) the ground below.
Subsoil
1. Trespass to Land
One of the oldest forms of action known to the common law, reflecting the early significance placed on property and title to it.
 Trespass of land consists of any direct and unauthorised interference where intentional or negligent were the persons
possession of land.
 No damage needs to be suffered in order to being the action – mere interference with the plaintiff’s right of possession
is sufficient to establish liability.
These principles were established and set out in Entick v Carrington (1765) 95 ER 807 (for a more modern definition of the tort
of trespass, look at Halliday v Neville (1984) 155 CLR 1 at 10)
 At common law a landowner owns all subsoil, including minerals beneath the surface, but excluding precious metals,
based on the above Latin maxim - Common law further permitted minerals to be excluded from a sale of the land by
expressed grant or reservation, such that the common law recognised that there could be separate ownership of the
subsoil.
 Property rights can extend to subsoil, as demonstrated in Stoneman v Lyons ((1975) 133 CLR 550) where it was held
that building workers permitted trespass in excavating a trench under the footing of an adjoining landowner’s garage.
 Logic suggests the need for some limitation on the physical extent of ownership below the surface of land but remains
a matter the conjecture just how far down the earth property extends.
2. Subsoil and Common Law
At common law, a freehold estate, included all minerals in that land, accept those minerals belonging to the crown
 The ownership of minerals entitled the landholder to extract minerals and to prevent others from interfering with those
minerals, however the crown retained a prerogative right to mine gold and silver
Separate Ownership: The ownership of minerals could be qualified by expressed land for reservation in the original crown land
grant, and the possibility of ownership in minerals, separate to the ownership in the lands surface, was recognised ( Cox v
Glue (1848) 5 CB 533)
In WA, until 1887, crown grants had only reserved gold, silver and other precious metals – accordingly, private ownership of all
minerals including copper, iron and lead was extensive but excluded royal metals
 From 1887, in WA, there was a shift to a new public interest perspective regarding minerals, and land regulations now
made the scope of crown reservations a matter for the governors discretion ( Land Regulations 1887 )
 With the arrival of responsible government in WA, the Crowns dominion over mines and minerals passed to the local
legislature
 From 1 January 1899, all crown grants were required to reserve to the Crown all gold silver, coper, tin and other
minerals, metals, gems or precious stones and coal or mineral oil, but a right to enjoy wells and springs of water on the
land and to bore and sink wells for water remained with the applicant (s Land Act 1898 , 2nd and 3rd schedule)
 Depth and limits to the Crown grants were also introduced of 40ft within the goldfields (s15 Land Act 1898
8
Petroleum – s9 Petroleum Act 1967 (WA) gives complete crown ownership over petroleum and helium over private land,
irrespective of when the crown grant was made
o Even today, in situations such as geothermal energy, the crown is given complete ownership of a resource
irrespective of when the crown grant was made
Due to the situation in WA prior to 1 January 1899, the date of the original Crown grant can be very significant in determining
whether a landowner owns a particular mineral beneath the land
o Even today, in the south west of WA, you can still find private mining operations – ie. the minerals beneath the
land were not reserved to the Crown at the time of the alienation of that land
Interestingly, s9 of the Mining Act 1978 compared to s138 Mining Act 1904 (WA) demonstrates there has potentially been a
retrospective expropriation of minerals in favour of the Crown
Airspace
1. Can airspace be regarded in its own right as “land” which can be dealt with separate from the soil?



The conveyance can occur by subdivision and sale, made clear in the Strata Titles Act 1985
Important to keep in mind that these cases turn on the definition of land within the meaning of an act and as Windeyer
J states in Bursill 1971, “it does not follow that the word ‘land’ is in every statutory context to be read as covering
interests above the surface to the land”.
Very dependent upon the particular statute and its context
Overall, it may be possible to register a title to airspace above a piece of land, however, if one looks through the Landgate
website in WA, consent to vacant airspace strata title schemes will be withheld.
2. Does the owner of the lands surface have a sufficient proprietary interest in the airspace above the land to
ground an action for trespass or nuisance in tort?
Appears that in Australia, from the cases below, property in airspace depends upon whether the use complained of effects
ordinary use of land and the mere fact that it does not actually interfere with the use of the land at the time is not a defence
Griffiths J: “The problem is to balance the rights of an owner to enjoy the use of his land against the rights of the general public
to take advantage of all that science now offers in the use of airspace. This balance is… best struck by restricting the rights of an
owner in the air space above his land to such height as is necessary for the ordinary use and enjoyment of his land…above that
height he has no greater rights in the air space than any other member of the public.” (Bernstein v Skyview & General Ltd
[1978])
Hodgson J: “The relevant test is not whether the incursion actually interferes with the occupier’s actual use of the land at the
time, but rather whether it is of a nature and at a height which may interfere with the ordinary use of the land which the
occupier may see fit to undertake.” (LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1989))

This is so, whether the incursion actually interferes with the actual use of the land at the time
There have been different views expressed by courts such that trespass caused by structures v trespass caused by other causes
(Anchor Brewhouse Developments Ltd v Berkley House (Dockland Developments) Ltd (1987) 284 EG, 929 (Scott J))

In this case, the approach of whether it was trespass by whether it interfered with ordinary use and enjoyment of the
land was dismissed by Scott J, and instead drew a distinction between trespass caused by structures and trespass
caused by other causes – in his view, trespass wouldalways exist where there was an invasion of airspace by a structure
In the case of Kelsen v Imperial Tobacco Co ([1957] 2 QB 334), an advertising sign erected by the defendants projected into the
airspace above the plaintiffs single story shop


Plaintiff sought a mandatory injunction on the grounds that the sign was a trespass but the defendants states that the
sign did not amount to a trespass but a nuisance, unless on the facts, no nuisance existed.
Court held that the invasion of the plaintiffs airspace was a trespass and not a mere nuisance and it was a proper case in
which to grant a mandatory injunction
9
LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1989) 24 NSWLR 490: In Australia however, limitations to the
decision in Lord Bernstein have been expressed:
Facts:


Defendant was carrying out commercial development of its land and had asked the defendant if it could erect
scaffolding over the plaintiff’s land.
Plaintiff gave qualified agreement stating it was fine provided money was paid, but the defendant refused to pay and
erected the scaffolding anyway and the plaintiff then sued in trespass.
Outcome:

The defendant tried to argue that there was no trespass because applying the Bernstein decision, the height and
manner of entry did not interfere with the plaintiff’s actual use of the land.
Hodgson J stated that the question was whether one should be able to use the land of another for considerable commercial gain
simply because the use causes no significant damage to the owner, believing that the answer to this question was generally no
The Lateral Boundaries to Land
1. Natural vs Artificial Boundaries



Lateral boundaries to land can either be natural (river bank) or artificial (survey point)
Natural boundaries can cause problems as they tend to shift over time, as opposed to artificial boundaries, which
remain static
“…the natural feature remains the primary boundary, and that lines on maps, if subordinate by description of the
natural feature, are merely secondary guides which are capable of correction from time to time” Beames v Leader
[2000] 1 Qd R 347, 358
Title boundaries:


Where land is bounded by title water, the boundary of the land at common law, is the mean high-water mark (average
level reached by the ordinary high tide)
Sunlea Investments Pty Ltd v NSW ((1998) 9 BPR 16, 707) demonstrates that the boundary can shift over time – land
below the mean high-water mark belongs to the crown.
2. Doctrine of Accretion
The Doctrine of Accretion applies to crown or private land bound by lakes, rivers or the sea


The natural process of accretion and erosion may alter the physical dimensions of land bounded by water.
At law, whether the boundary varies or remains fixed in the position it occupied before the change, depends upon on
how the change occurred.
To illustrate this doctrine, refer to the Southern Centre of Theosophy case: Southern Centre of Theosophy v SA.




Important due to the summary it provides regarding the law
Involved proprietor who held a perpetual Crown lease of land at the edge of an inland lake
The land increased in size by fluvial action and by windblown sand, and the question for the court was
whether proprietors title extended to the increase in land
Court made various important findings:
1.
2.
3.
4.
Where land was conveyed with a water boundary, including the boundary of an inland lake, the title extended to land
added to it by accretion, unless the Doctrine of Accretion was plainly excluded – the doctrine was not excluded merely
because the original boundary could not be identified
The doctrine was capable of application to land leased by the Crown, and in circumstances in where both the increase in
land area and the land under the water of the lake was allodial property of the Crown – proprietor had a right to any
increase of any land added by accretion
In the case of an alteration of a land/water boundary, the doctrine of accretion was capable of applying to an increase in
the area of land, caused solely by windblown sand, and it was unnecessary to distinguish between that part of the
accretion occurring by the actions of water of the lake, and that which had occurred by the deposit of windblown sand
Before accretion could apply, it is essential that the accretion should have been both gradual,
o and imperceptible – here, the increase of the size of the lake was gradual and imperceptible
o and the accretion due to windblown sand had also been gradual and imperceptible, and
o accordingly, the doctrine of accretion applied in this case
10
3. Requirements of the Doctrine of Accretion
Applies to all land bound by a water boundary eg. lakes, rivers or sea and the requirements are as follows:
1.
2.
3.
4.
5.
6.
7.
8.
9.
The Boundary must be so slow and gradual as to be imperceptible to the naked eye (Hazlett v Presnell (1982) 149 CLR 107,
116))
This case saw that the boundary of the state of Victoria was subject to alterations resulting from gradual and imperceptible
erosions and accretion
Accretion or erosion must result from natural processes (Verrall v Nott (1939) 39 SR(NSW) 89)
Actions of an owner contributing to the natural processes, eg by the conduct of artificial works, will not prevent the doctrine
applying, provided there was no intention of the landowner to assist that process.
“The boundary of land…varied as high-water mark varied, notwithstanding that a certificate of title had been granted in
respect of those lands… the plaintiff was entitled to the benefit of any accretion from the sea, although the boundary of his
land was ascertainable”.
But the doctrine of accretion does not apply to land formed from artificial reclamation. That land belongs to the Crown (AG:
Southern Nigeria v John Holt and Co (Liverpool) Ltd [1915] AC 599 at 615)
In this case, it was held that reclaimed land, which was not the result of natural accretion, vested in the Crown as owner of
the foreshore.
Gradual and imperceptibly lost as a result of encroachment by the sea transfers land to the Crown and is lost to the
adjoining owner Re Hull v Selby Railway (1839) 151 ER 139
However, if land is suddenly eroded by a storm, the land downers title is not lost, and they may regain land by reclamation
works.
10. Public policy justifications for the doctrine of accretion (Southern Centre of Theosophy Inc v SA [1982] AC 706)
11. The issue in this case was whether an additional 20 acres of newly exposed land caused by sand blown from wind could be
added to the original grant of land.
12. The court, in finding it could be, stated “Except in cases where a substantial and recognisable change in boundary has
suddenly taken place (to which the doctrine of accretion does not apply), it is manifestly convenient to continue to regard
the boundary between land and water as being where it is from day to day or year to year. To do so is also fair …”
13. Convenience and fairness seem to be public policy justifications here.
14. Land bounded by a private road/non-tidal water – ‘Middle Line Rule’.
15. Where land is bounded by a road or by waters that are non-tidal, the common law presumes that ownership extends
beyond that boundary and up to the middle line of the road or the mid-point of the water, known as the ‘middle line rule’
16. The ‘middle line rule’ is rebutted by unequivocal evidence that title to the middle was not intended to pass – and in any
event, this rule has been rendered largely restricted by Rights in Water and Irrigation Act 1914 (WA) and Land Administration
Act 1997 (WA) (“LAA”)
3. Rights in Water and Irrigation Act 1914 (WA)
Bed of watercourse etc. on land boundary remains Crown property.
1) Subject to subsection (4), where a watercourse or wetland forms the boundary or part of the boundary of a parcel of land
that has at any time been alienated by the Crown, the bed thereof shall, for the purposes of this Act, be deemed to have
remained the property of the Crown, and not to have passed with the land so alienated.
2) Subject to subsection (4), where a watercourse or wetland forms the boundary, or part of the boundaryof a parcel of land
that is alienated by the Crown, the bed thereof shall, notwithstanding such alienation, remain the property of the Crown,
and shall not pass with the land so alienated.
3) Subsections (1) and (2) apply notwithstanding that one and the same person has been or is the owner ofthe lands adjacent
to both banks.
4) This section does not apply to —
a) the bed of a natural collection of water into and out of which flows a river, stream, or creek to the extent that it exceeds
in width the width of the river, stream, or creek at its inlet to or outlet from that natural collection of water; or
b) the bed of a natural collection of water, whether or not it is part of a watercourse, to the extent that it is cultivated,
either wholly or in part, at any time during the year, or is capable of being drained and cultivated.
s55 LAA: Ownership of public roads is vested in the Crown
11
Fixtures
Common areas of dispute are the circumstance in which items of personal property which are attached to land, may lose their
identity as chattels and merge with the land – this is known as the law of fixtures.
1. The Doctrine of Fixtures
Common law maxim for the Doctrine of Fixtures is “quicquid plantatur solo, solo credit,” which says, whatever is affixed to the
soil becomes part of the soil. However, this maxim can also not be taken at face value – the maxim is mostly just a useful starting
point. Commissioner for Railways v AG ([1974] AC 328 at 350-351) for further information on these maxims
2. Chattels v Fixtures
1.
2.
3.
If land is sold, fixtures will pass to the buyer as part of the realty, without need for special mention in the contract of sale,
and contrastingly, chattels will not pass to the buyer without special mention in the contract of sale to the buyers.
Mortgage over land will cover fixtures but not chattels.
It is a common fixture of State Revenue Law that stamp duty is charge on fixtures but not chattels.
3. Common Law Test
The common law test is generally applied to determine whether an object is a fixture or a chattel – there are two tests which the
courts look to in the absence of expressed contractual agreement between the parties.
i.
ii.
Degree of annexation test
Purpose of annexation test
These two tests are related in the sense that the degree and purpose of annexation will indicate the intention of the annexure.
Holland v Hodgson (1972) LR 7 CP 328





Case involved the plaintiff who was mortgagee of a mill, together with all the fixtures inside the mill – the owner of the
mill later transferred his assets to a trustee of creditors.
The trustee then ceased looms from the mill and sold them.
The looms had been attached to the mill floor by nails so that they could be propelled by steam.
The looms could be removed without serious damage to the floor.
Plaintiff sued the defendant for the looms.
Outcome:


The court held that the looms were annexed to the mill and so had become apart from the land.
If an object is attached to the land, other than by its own weight, however lightly or slightly, prima face, the court this is
a fixture – if it is attached to land, only by its own weight, on the other hand, prima face, it is a chattel.
o “There is no doubt that the general maxim of the law is that what is annexed to the land becomes part of the
land, but it is very difficult, if not impossible, to say with precision what constitutes an annexation sufficient for
this purpose. It is a question which must depend on the circumstances of each case, and mainly on two
circumstances, as indicating the intention, viz, the degree of annexation and the object of annexation.
o When the article in question is no further attached to the land than by its own weight, it is generally to be
considered a mere chattel. But even in such a case, if the intention is apparent to make the articles part of the
land, they do become part of the land . . . on the other hand, an article may be very firmly fixed to the land,
and yet the circumstances may be such as to shew that it is never intended to be part of the land, and then it
does not become part of the land.
o Perhaps the true rule is that articles not otherwise attached to the land than by their own weight are not to be
considered as part of the land, unless the circumstances are such as to shew that they were intended to be
part of the land, the onus of shewing that they were so intended lying on those who assert that they have
ceased to be chattels, and that, on the contrary, an article which is affixed to the land even slightly is to be
considered as part of the land, unless the circumstances are such as to shew that it was intended all along to
continue a chattel, the onus lying on those who contend that it is a chattel .”
The presumptions from this are:
1.
2.
A chattel attached to land other than by its own weight, is a fixture – with the greater the annexation, the stronger the
presumption.
If it is a chattel only attached by its own weight, then it has not become a fixture and remains a chattel.

Subsequent cases in referring to this judgement have focussed on the circumstances of the case as indicating the
intention, keeping in mind the degree and purpose of annexation.
12
4. Degree of Annexation Test
The practical importance is that it will apportion burden between the litigants.
NAB v Blacker [2000] FCA 1458 at [17]:

Conti J, in the federal court stated “Where an item of property is affixed to land at any extent, aside from resting on its
own weight, it is presumed to be a fixture and the burden of proof lies upon the party asserting that it is not a fixture –
conversely, where an item of property is not affixed to the land, but merely rests on its own weight, it is presumed to be
a chattel and the party asserting that it is instead a fixture, bears the onus of proof”
Issue:


The problem with the degree of annexation tests is that overreliance on it is problematic and the test is unnecessarily
rigid.
Palumberi v Palumberi (1986) 4 BPR 9106 at 9110:
o Kearney J stated “there is a perceptible decline with a tendency to greater emphasis being placed upon the
purpose of the object of annexation.
5. Purpose/Object of Annexation test
Focus of the court is to examine whether the object was attached to the land on the one hand as a temporary measure, or
whether it was affixed in order to benefit the land
However, there are a variety of considerations to consider for this test: In Sanwa Aust Leasing Ltd v National Westminster
Finance Australia ((1998) 4 BPR 9514), Powell J set out 3 points regarding this test:
1.
2.
3.
The question whether a chattel has been placed on, or fixed to, land has become a ‘fixture’ is ultimately to be answered
by reference to the intention with which it has been placed on, or affixed to, the land.
The question is to be determined by the court having regard to all relevant circumstances, including the following:
a. The nature of the chattel in question.
b. The manner in which it is usually, or most conveniently, utilised.
c. The degree of annexation of a chattel to the land.
d. The time – whether infinite or short, or indefinite during which the chattel is intended to remain ‘annexed to
the land’.
e. The purpose for which the chattel has been annexed to the land.
f. Any statement of intention made by, or agreement entered into between, the owner of the chattel and the
owner of realty.
None of the above is to be regarded as conclusive.
When considering cases, its important to remember that these decision illustrate that apparently similar facts can result in
widely differing decisions – just because you have a chattel found to be a fixture in one case, does not necessarily mean the
same chattel would be found to be a fixture in another case, the reason being that the chattel in each case has to be assessed
having regard to the relevant surrounding circumstances (Yallingup Beach Caravan Park v Valuer General (1994))
A question that has occasionally arisen is in relation to considering the object or purpose of annexation is it objective or
subjective intention of the party placing the item on the land?

In the case of Hobson v Gorringe (1897), the court found that the purpose or intent of annexation is an objective intent
which must be ascertained by investigating not the subjective intent of the person making the affixation, but external
factors which are patent for all to see (traditional view)
NAB v Blacker (2000) 104 FCR 288, [10]-[12]:
Mortgagee entered into possession in accordance with mortgagee terms.




The mortgage related to certain land and all plant machinery and other improvements affixed to this.
On quitting possession of the property, the mortgagor had removed irrigation – equipment comprising electric pumps,
sprinkler heads and other items.
The land in question was a dairy farm and the pumps were bolted to rails and connected to steel skids that rested on
the ground by their own weight.
Mortgagee claimed that these were fixtures, and that the mortgagor must return them
Outcome:

The court held that the disputed items of plant and equipment were chattels and not fixtures.
13
Conti J, discussed the law on fixtures, including the purpose and degree of annexation: “In determining the purpose or
object of annexation, a variety of considerations may be taken into account. The court ought as a general rule to have regard
to –
o

Whether the attachment was for the better enjoyment of the property generally or for the better enjoyment of
the land and/or buildings to which it was attached. The nature of the property the subject of affixation.
o Whether the item was to be in position either permanently or temporarily.
o The function to be served by the annexation of the item”.
“In determining the degree of annexation, the court may consider the following:
o Whether removal would cause damage to the land or buildings to which the item is attached.
o The mode and structure of annexation.
o Whether removal would destroy or damage the attached item of property.
o Whether the cost of removal would exceed the value of the attached property.”
Eon Metals NL v Commissioner of State Taxation (1991) 91 ATC 4814
This case demonstrates the criteria that the court applies to distinguish between some items which are found to be chattels and
some items which are found to be fixtures.


Ipp J made it clear that subjective intention may be relevant but that it was objective intention that is of paramount
significance.
“The ultimately fact to be proved is the objective intention that ought to be imputed or presumed from the surrounding
circumstances of the case”.
Facts:



Case involved the sale of mining plant and equipment – there was a stamp duty exemption of the conveyance of goods
and merchandise.
Equipment had not been severed from the land, although it was intended to be moved from the mine site.
Question for the court was whether items of equipment constituted chattels or fixtures – if the items constituted
fixtures, stamp duty would be payable, however, if they were chattels, stamp duty would not be assessed.
Outcome:





Court said that the mere intention of the parties’ concern to remove the items from the land at some future date did
not automatically transform them into chattels
In determining whether chattels had become part of the land, Ipp J said that regard should be had to all relevant
circumstances, with no particular factor necessarily having primacy, and every case is depending upon its own facts.
Court further said that the transportable shed, the perimeter fencing, gates, water storage tanks with pumps, and piping
were not worth salvaging – they should be classified as realty in view of their degree of annexation, coupled with the
objective intention with which they had been attached to the land, during the lifetime of the mine.
Other items, however, could be considered chattels – the court took into account the limited life of the mine, the
transportable character of the equipment concerned, the common practice to transfer equipment of that kind,
economic incentives to remove it, the relatively slight degree of attachment to the ground and the facility with which
detachment could occur.
Due to these considerations, the items of the power plant inside the shed were considered chattels, but the shed itself
and the day tank, fuel lines and associated pump, were to be regarded a fixtures as they were unlikely to be removed
and likely to be destroyed at the end of the life of the mine
Yallingup Beach Caravan Park v Valuer General (1994) 11 SR (WA) 355
This case concerned park homes in a caravan park which were permanently on the site


Question was whether they should be regarded as fixtures and therefore included for the purposes of the assessment of
the gross rental value of the land
Park homes which were owner occupied were also considered
Outcome:



The court found that the test of whether an object is a fixture is based upon the intention of the person placing the
object on the land
The test is an object of assessment of the intention
The degree of annexation is of particular relevance and the intention should be imputed or presumed in this case, was
that the homes do not constitute fixtures or improvements to the land
14
Key parts on the outcome:
1. The test of whether an object is a fixture is based upon the intention of the person placing it upon the land in question
2. “the question is not one of ascertaining the actual intention but of determining from the circumstances of the case, and in
particular from the degree of annexation and the object of annexation, which is the intention that ought to be imputed or
presumed” (Anthony v Commonwealth (1973) 47 ALJR 83, at 89)
3. As suggested by the High Court, the degree of annexation is of relevance – if a chattel is securely fixed to the land there is a
strong presumption that it is a fixture, whereas if it is only lightly connected the presumption is that it is not a fixture.
National Dairies v Commissioner of State Revenue: decision of the WA Supreme Court of Appeal: Involved the purchase of a
dairy business, including land premises, plant and equipment.




The question was whether certain items attracted the assessment of stamp duty, depending upon whether the items
were fixtures or chattels.
The court of appeal stated that the question of whether an item placed on land is a fixture or a chattel, isa question of
fact to be determined, having regard to all relevant circumstances.
This includes the object of annexation, the degree of annexation and whether the annexation is objectively intended to
be temporary or otherwise.
The actual subjective intention of the parties, including the intention of the owner for the time being of the chattel, or
of the land, is not conclusive of the status of something attached to the land, but the court said this is not irrelevant.
Outcome:
Court made the observation that developments in commercial practice, mean that what was once classified as a fixture may be
classified as a chattel today.



The court found that items not otherwise attached to the land, than by their own weight, are to be considered
chattels, unless circumstances of the case show they were intended to be part of the land.
The onus of showing that they were so intended, falls on those who assert they are fixtures – on the contrary, items
attached to the land, even slightly, are to be considered fixtures, unless the circumstances are to show that they
were intended all along to continue as chattels – the onus being on those who contend that they are chattel.
In this case, the various items of interconnected plant and equipment were fixtures which had been annexed to the
land for the purpose of the better enjoyment of the land for milk processing purposes and even the items which
were not annexed to the land, other than by being connected to the items of plant and equipment, were found to
be fixtures because their interrelationship was in the context of their better enjoyment of the land
Notable:


This case notes an earlier decision made by Jordan CJ in the 1938 case in NSW of Australian Provincial Assurance and
Corronero which says that the test of whether a chattel which has been to some extent fixed to the land as a fixture, is
whether it has been fixed with the intention that it is to remain permanently, or for an indefinite or substantial period;
alternatively, whether it has been fixed with the intent that it shall be there only for some temporary purpose
The court of appeal goes on to doubt the correctness of Jordan CJ’s observations, saying now that the matter of
chattels vs fixtures cannot be resolved simply by reference to whether the annexation was intended to be temporary
or otherwise – that alone is not a sufficient consideration.
Intention needing to be assessed objectively:
“It is plain that while regard should be had to all relevant circumstances, no particular factor necessarily has primacy,
and every case depends upon its own facts. Nevertheless, there does appear to be a trend towards attaching particular
significance to the intention with which the item is placed upon land…As regards intention, while subjective intention
may be relevant, it is an objective intention that is of paramount significance…[T]he ultimate fact to be proved is the
objective intention that ought to be imputed or presumed from the circumstances of the case.”


It is important that circumstances are assessed objectively.
Despite this, there is still the occasional reference to subjective intention being the standard to be applied.
o Important to treat any authorities which believe the test is solely a subjective intention test, as suspect
o Example Miles CJ in Ball-Guymer v Livantes ((1990) 102 FLR 327 at 330), where his honour states that the
relevant test on fixtures to be applied is a subjective one – in Australia, while not conclusive could still include
as a relevant factor.
15
Other Relevant Considerations Include in Annexation Tests





Use for which the chattel is designed.
Use to which the chattel us put while on the land.
Whether damage would be caused to the chattel or the land by removing the chattel
The period of time for which the chattel is on the land; and
Statements made by the owner of the chattel as to his intention, if appropriately proved and evidenced
The more recent authorities indicate a further decline in the comparative importance of the degree of annexation…with a
greater emphasis upon the purpose or object of annexation. Associated with this shift is a greater reliance upon the individual
surrounding circumstances of each case.
Time to assess intention.

Further, the relevant intention to be assessed is the intention of the time the object was attached to the land – land use
and intention may change overtime but it's important to focus on what was the intention at the time the items attached
to the land, not what a later intention might be.
Current approach:

Question of evidence:
o Written or verbal expressions of the purpose of the attachment are not relevant (Love v Bloomfield (1906) VLR
723)
o The intention of the parties as to the ownership of the chattel fixed to the land, is only material in so far as
such intention can be presumed
o Terms expressly or implicitly agreed between the owner of the chattel and the owner of the land are generally,
although not always, irrelevant (Melluish v BMI (1995) 4 All England Reports 453, at 461)

Australian cases on fixtures largely turn on particular facts – need to be careful in that just because one type of object
has been classified as a fixture, it doesn’t necessarily mean that it will be found to be a fixture in the next
It is even possible that a house could be found to be a chattel (May v Ceedive (2006) 13 BPR 24,147), houses on land
leased to tenants were held to be chattels because of a history of dealing between landlords and tenants, under which
the tenants were treated as owning their houses and paying only a ground rent for the land on which the houses stood.
Overall, it seems that courts are increasingly shying away from applying rigid degree and object of annexation test, and
instead, they are paying regard to all of the relevant circumstances of the case – this therefore means that the law is
increasingly unpredictable.


Changes in technology/society:


Changes in society are also an increasing consideration.
National Dairies, it was noted the extent to which the development or large haulage techniques could result in a
transportable house, more readily being characterised as a chattel.
16
Fixtures, Encroachments, Fencing
1. “Exceptions” to the Law of Fixtures
Tenants’ Fixtures at Common Law


One of the most important examples when looking at exceptions to law of fixtures. Concerned with objects, affixed to
land by a tenant, to benefit the tenant’s business and not as a permanent addition to the premises.
Public policy here ensures that the tenants be given a limited right to remove chattels which they have attached to the
land during their lease.
Reason as to why tenants’ fixtures receive special consideration: Penton v Robart (1801) 102 ER 302: “…what tenant will lay out
his money in costly improvements of the land, if he must leave everything behind him…annexed to the land?”

Tenants’ fixtures here include that of both lease hold tenants and life tenants.
In the history of this exception, could look at the decision of Manchetta Developments v Garmanson (1986) QB 1212, pg [1218
and 1219]: Case involved the lease of industrial premises:

Holes were made by the tenant in exterior walls to accommodate trade fixtures. Tenants’ assets were transferred to the
defendant who removed the fixtures before delivering up possession but failed to fill in the holes. Question on the
liability for the damage done to the premises

Dillon LJ comments on the development of the tenants right to remove trade or trade fixtures as an exceptional
mitigation to the law regarding fixtures:
“Development of a tenants right to remove trade or trade fixtures was a mitigation. It came about not by any
change in what is a fixture, what in qualification of the tenant’s obligation not to remove fixtures once they have
been affixed to land.” “it is possible that a tenants right to remove fixtures when first recognised was upheld
irrespective to any damage caused to the premises by removal” [pg 1218]

However, now it is the case that the tenant may repair whatever injury was sustained.
TEC Desert Pty Ld v Commissioner of State Revenue [2010] HCA 49, [26]:
“…all fixtures attached by the tenant are “landlord’s fixtures”, i.e. must be left for the landlord at the end of the
lease. But…exceptions to this rule have arisen, and fixtures which can be removed under these exceptions are
known as ‘tenant’s fixtures. This expression must not be allowed to obscure…that the legal title to the fixture is
in the landlord until the tenant chooses to…sever it. The tenant may do soonly during the tenancy or (except in
the case of forfeiture or surrender) within such reasonable time thereafter as may properly be attributed to his
lawful possession…”



Appeal from the WA supreme court
Sale agreement pursuant to which certain objects were purchased.
Legal title to the item remains with the landlord until the tenant severs the object. The item remains a fixture once
attached to the land until the tenant executes a severance of that item.
Removal of Tenant’s Fixtures after Expiration of the Lease
D’Arcy v Burelli Investments Pty Ltd [1989] 8 NSWLR 317




Tenant remained in possession under a lease which had expired, and the questions was whether items could be
removed by the tenant.
Court stated that with a tenancy of uncertain duration, such as a tenancy at will, a tenant may remove tenants’ fixtures
within a reasonable time.
With a fixed term lease i.e. Where a lease has a certain time, unless there is something special in the lease or unless
there is a new lease, or a tenant remains in possession under colour of right, the tenants’ rights right to remove tenants’
fixtures ceases at the exploration of the lease
A tenant can remove items under this exception even after the lease has expired provided that the tenant remains
lawfully in possession.
NZ Government Property Corporation v HM & S Ltd [1982] QB 1145;
17



Held that at common law, a tenant, excluding an agricultural tenant, had the right to remove tenants’ fixtures form the
least premises, so long as the tenant was in possession as a tenant.
Court of appeal also set out 3 points:
1. A tenant who vacates the premise at the end of the lease without first removing the tenants’ fixtures is
considered to have abandoned them.
2. A tenant who remains in possession lawfully after the end of the lease, is entitled to remove the tenants’
fixtures for as long as the tenant remains lawfully in possession.
 There is no right of removal where the tenant’s possession after the lease has ended is unlawful and
the tenant is a trespasser.
3. If the tenant surrenders the lease but remains in possession, the tenant’s position will depend upon a question
of construction of the instrument to surrender to see if the right to remove the fixtures is abandoned or not.
There is generally a grace period for a tenant after the period of a fixed term tenancy.
Removal by a Defaulting Tenant Permitted
Roberts and James v Huntington [1901] 3 WAR 33

Building erected on land were found to be in the nature of chattels and the original tenant had power to assign and
his assignee over the covenant of the lease had power to remove these buildings, and this was so even though
there had been a default under the lease
Damage by Removal Must be made Good by a Tenant
Mancetter Developments Pty Ltd v Garmanson [1986] QB 1212 at 1219


A tenant who retains right of remove must repair damage caused by that removal (this is clear in the Manchetta
Developments case)
Once severed, the fixture resumes its status as a chattel
Rule on Tenants’ Fixtures

These rules are not available to any fixtures – the rules on tenants fixtures are limited to trade, domestic or ornamental
objects and exclude items which are so firmly affixed that removal would destroy their essential character or value.
Agricultural Fixtures
Re Cancer Care Institute of Australia Pty Ltd (admin apptd) (2013) 16 BPR 31,529




Defendant who owned a medical centre, the plaintiff owned part of the medical centre under a lease (although not in
writing)
Case arose around 2 pieces of equipment which had been purchased by the tenant for almost $9M
It was registered in the Personal Property Securities Register
Objects were installed on steel-based frames which were grouted into the floor
Two issues before the court:
1.
2.
Whether the base frames formed party of these objects
Whether the objects were fixtures: if they were, this would mean that the landlord and the secured lenders to the
landlord had an interest in these objects.
Black J: Found that the base frames were distinct from and not part of the objects (they were known as linear accelerators) and
this is because they were separately installed several weeks before the linear accelerators – the linear accelerators were regularly
relocated and could be installed into other base frames. They had not become fixtures as:
1.
2.
3.
4.
Linear accelerators were expensive moveable equipment.
The expensive items and the fact they were moveable tended strongly against an objective intention that the items
become the landlord’s property.
Removal would not destroy or damage the linear accelerators – the value of the linear accelerators exceeded the cost of
removal. The time needed would also be limited to several days only.
There was no written long-term lease in existence which strongly tended against a finding that the tenant’s intention
that the objects should become a fixture. Inherently unlikely the tenant would objectively intend the expensive
equipment to become the landlord’s property when it had no security of its lease by a written agreement.
18
5.
6.
The linear accelerators had been purchased on credit on terms that the financier would retain a security interest – this
tended against the objective intention that they would become part of the premises. Financier and plaintiff had
proceeded on the basis that the plaintiff would be able to give financial security over the objects which would be
inconsistent with any objective intention that the equipment become part of the premises.
The design of the medical centre was well suited for conducting radiological medical procedures, but the design of the
area could be used for radiation equipment other than the linear accelerators. It did not follow from the design of the
medical centre or the treatment rooms that the plaintiff as a tenant would have intended for the objective of the liner
accelerators to become part of the landlords property.
Residential Tenancies Act 1987 (WA)
47. Right of Tenant to Affix and Remove Fixtures etc
1) A residential tenancy agreement may provide that the tenant –
a) Shall not affix any fixture or make any renovation, alteration or addition to the premises; or
b) May affix any fixture or make any renovation, alteration or addition to the premises, but only the lessor’s consent.
2) Where a residential tenancy agreement makes the provision described in subsection (1)(b) it is a term of the agreement that
–
a) The lessor shall not unreasonably withhold such consent; and
b) The tenant may remove any fixture that the tenant has affixed to the premises, with the lessor’s consent, during the
period that the tenant has continued in possession of the premises under the agreement, unless the removal of the
fixture would cause irreparable damage to the premises; and
c)
Where the tenant causes any damage to the premises by removing any fixture, the tenant shall notify the lessor and, at
the option of the lessor, repair the damage or compensate the lessor forany reasonable expenses incurred by the lessor
in repairing the damage.
3) It is a term of every residential tenancy agreement that –
a) The lessor may affix any fixture or make any renovation, alteration or addition to the premises, but only with the
tenant’s consent; and
b) The tenant must not unreasonably withhold such consent.
Goods Belonging to a Third Party
Goods which belong or have a security interest over them in favour of a third party
Hobson v Gorringe [1895-99] All ER 1231


Under a higher purchase agreement, Hobson let a gas engine to be possessed by King – the higher purchase contract
retain ownership of the contract by Hobson until paid for by King.
King bolted the engine to floor of mill which was mortgaged later to Gorringe who exercised possession under the
mortgage.
The question was who had the better claim over the engine?




The court held that on a true construction of the agreement, coupled with the annexation of the engine to the land, this
had become a fixture subject as between the owner and hirer to the owners right to unfix it and take possession if the
hirer failed to take possession.
This right impose no legal obligation on any guarantee of the land from the hirer, nor could it be enforced in equity
against any purchaser of the land without notice of the right.
Owner’s remedy here was to sue the hirer personally; the engine was a fixture here, so it was free of the interest of
Hobson of which Gorringe had no notice
Hobson could still sue King.
Statutory Regime Prior to PPSA
Hire Purchase Act 1969 (WA) s27  Hire goods that have become fixtures.
19
1. Goods comprised in a hire-purchase agreement which, at the time of the making of the agreement, were not fixtures to land
shall not, in respect of the period during which the agreement remains in force, be treated as fixtures to land.
2. Notwithstanding anything contained in subsection (1), the owner is not entitled to repossess goods which have been affixed to
a dwelling-house if, after the goods have become so affixed, any person other than the hirer has bona fide acquired for valuable
consideration an interest in the land without notice of the rights of the owner of the goods
Chattel Securities Act 1987 (WA) s6  Fixtures
1. If, after a security interest attaches, goods subject to the security interest are affixed to land and become fixtures, the fixtures,
for the purposes of the exercise of the secured party’s right to take possession of, remove or sell the goods, shall be deemed not
to have become fixtures.
3. If, after a lease of goods is made, goods subject to the lease are affixed to land and become fixtures, the fixtures, for the
purposes of the exercise of the lessor’s right to take possession of the goods, shall be deemed not to have become fixtures.
5. If, after a hire-purchase agreement is made, goods subject to the agreement are affixed to land and become fixtures, the
fixtures, for the purposes of the exercise of the owner’s right to take possession of the goods, shall be deemed not to have
become fixtures.
7. ….a secured party is not entitled to take possession of goods that have become affixed to land and become fixtures if, after
the goods have become so affixed, a person other than the secured party has acquired an interest in the land for value in good
faith and without notice of the security interest of the secured party.
Personal Properties Securities (Commonwealth Laws) Act 2011 (WA)




New regime introduced in Australia regarding security interests in chattels
The PPSA does not apply to an interest in land, expressly excluding interest in a fixture
Has completely changed the way PPS are dealt with in Australia, following a model already implemented in NZ and
CAN
Act does not apply to an interest in a fixture.
Fixture  means goods, other than crops, that are affixed to land.
Cancer Care Institute of Australia Pty Ltd (Administrator appointed) [2013] NSWSC 37: the definition of fixtures is to be
interpreted in accordance with the common law meaning of the term.
Good example of where the common law of fixtures is considered.
Power Rental Op Co Australia, LLC Group Power Pty Ltd (In Liq) v Forge Group Power Pty Ltd (in Liq) (receivers and managers
appointed) [2017] NSWCA 8



Power Rental was arguing over a lease of turbines:
The lease had been leased by General Electrics to the forge group, however they had not registered their interest under
the PPS register.
Administrators were later appointed over forge to which General Electrics argued that the turbines were fixtures and
therefore outside of the PPSA.
Held that the turbines were not fixtures:
1.
2.
3.
4.
They were designed to be mobilised.
They were only intended to be on the land for 2 years.
Removal would cause no damage to the items.
The provisions of the lease stated that the items were to remain personal property.

Overall, the court said that it was for better enjoyment of the chattels, not better enjoyment of the land and it cannot
be thought the forge would have intended that ownership of the items attached to the land.
The PPSA, in leaving in the place the common law as opposed to fixtures, places a heavy onus upon any party with an interest in
the chattels to register that interest under the act.
Romalpa/Retention of Title Clauses

The fact that a chattel has been the subject of a high purchase agreement, chattel lease or Romalpa clause (retention of
title clause) does not prevent it from being declared a fixture in relation to common law principles.
20


Here one is concerned with a party who is surrendering possession of an object but at the same time, retaining title to
that item, until the object has been paid for
Sanwa Australia Leasing Ltd v National Westminster Finance Australia [1988] 4 NBPR 9514 (NSWSC)
Removal Against a Mortgagee
The right to remove a fixture cannot generally be exercised against a mortgagee of the land whether the items were affixed
before or after the mortgage
NSW Co-Operative Ice v Cold Storage Company (1891) 9W1 NSW 122


Where there is a mortgage, fixtures whether annexed either before or after the date of the mortgage, are considered
part of the security secured by the mortgage and cannot be removed.
S41 Property Law Act 1969 (WA)  subsection 3 in particular
o S7 of the PLA gives the definition of conveyance, which includes a mortgage.
2. The Doctrine of Accession
This governs the ownership of chattels where there has been merger of the chattels – it deals with the problems rights of the
parties in circumstances where it is no longer possible to easily separate chattels.
Rendell v Associated Finance Pty Ltd [1957] VR 604




The case concerned a motor vehicle, and the question was whether the accessories attached to the motor vehicle
passed to the owner of the vehicle.
Court found that in cases where accessories in spare parts are attached to motor vehicles, property in the accessory
does not pass to the owner vehicle if the owner of the accessory did not intend it to pass.
It is for the owner of the owner of the vehicle to establish that the necessity of the case requires application of
principles whereby the property is to pass by operation of law.
Accessories continue to belong to the original owner unless it is shown that, as a matter of practicality they can’t be
identified and if identified, they have been incorporated to such an extent they cannot be detached from the vehicle.
3. The Doctrine of Intermixture
Separate objects are mixed, so as to become indistinguishable.
McKeown v Cavalier Yachts (1988) Aust Torts Rep 80-172




Chattels of the original yacht hull became property of the owner – ie the owner of the principle chattel becomes the
owner of the accessory chattel
This raises the question, when is it rational to separate objects and which object is to be considered the principal chattel
and what object the accessory chattel?
This case illustrates that the property in a chattel can change where the improvements cannot be removed without
destroying the original chattel.
Here, separate objects are so mixed as to become indistinguishable.
4. The Law of Encroachments
Generally, when a building is erected on land generally becomes part of land. Therefore, at common law, the result is that if B
builds on A’s land, the building vests in A. Equity can prevent A from vesting title where 5 essential criteria are identified:
1.
2.
3.
4.
5.
Plaintiff, B, must have made a mistake as to his legal rights
Plaintiff must have expended money or done something on faith of their mistake
The defendant, A, possessor of the legal right, knew of the existence of his or her rights which are inconsistent with
those of the plaintiff
The defendant knows the plaintiffs mistaken belief as to the plaintiff’s rights
The defendant encouraged the plaintiff, in the plaintiffs expenditure of money, or the acts done, either directly or by
abstaining form asserting legal rights
Buildings Erected under the Mistake of Title
Brand v Chris Building Society [1957] VR 625: Illustrates the application of the necessity to demonstrate all 5-requirements and
the problems that may occur if this isn’t’ achieved.
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




Here, the defendant built a house on the plaintiff’s land by mistake and the plaintiff sought to restrain the defendant
from demolishing the house.
The plaintiff didn’t know that the defendant builds a house on his land until it was virtually completed.
Defendant argued that the defendant had been unjustly enriched however the plaintiffs’ objects weren’t injured.
It was held that in the absence of something like fraud by the plaintiff, there was no equitable defence which the
defendant could rely upon to defeat the plaintiffs claim. Further, the doctrine of unjust enrichment had no application.
The emerging result of unjust enrichment could result in the case being decided differently today eg. Nepean District
Tennis Association v Penrith City Council (1988) 4 BPR 9645
Encroachment of Buildings onto Adjoining Land


The decision in Brand demonstrates the unsatisfactory consequences of concentrating on the physical fact of an
annexation of an object to land, rather than the real question of whether the owner of the land should acquire a
property interest in the object so affixed.
Caused considerable concern within the legal profession and within parliament. The following statutory provisions were
then enacted:
S122 Property Law Act 1969 (WA)  power of Supreme Court to grant special relief in cases of encroachment.
S123 Property Law Act 1969 (WA)  applies to encroaching buildings as well as to cases of mistake as to the identity of land.

In understanding how these two sections are separated:
Executive Seminars Pty Ltd v Peck [2001] WASC 229, [154], [155], [162] (Hasluck J): “Sections 122 and 123 of the Property Law
Act 1969 allow for relief in circumstances where one property owner erects a building on the adjoining property of another.
Section 122 can be brought into play where the encroaching building was not erected as the result of gross negligence.
Section 123 is available where the building was erected because of a mistake as to any boundary. I note in passing that these
statutory provisions are remedial and as such are to be construed liberally. Section 123 deals with relief in cases of mistake as to
boundaries or identity of land. By s 123(1), where a person who has or had an estate in any piece of land has erected a building
on any other piece of land, if the building has been so erected because of a mistake as to any boundary, that person may apply to
the court to make an order in accordance with the section.”
Important Aspects of Provisions in s122 and s123
S122 of the PLA
1) Where any building on land encroaches on a part of adjoining land, whether the building was erected by the owner of the
first mentioned land (in this section referred to as the encroaching owner) or by any of his predecessors in title, either the
encroaching owner or the owner of the adjoining land may apply to the Court, whether in an action or proceeding then
pending or in progress and relating to the land encroached upon or by an originating summons, to make an order in
accordance with this section
2) If it is proved to the satisfaction of the Court that the encroachment was not intentional and did not arise from gross
negligence, or, where the building was not erected by the encroaching owner, if in the opinion of the Court it is just and
equitable in the circumstances that relief should be granted to the encroaching owner or any other person, the Court,
without ordering the encroaching owner or any other person to give up possession of the piece of land encroached upon or
to pay damages, and without granting an injunction, may if it thinks fit make an order:
a) vesting in the encroaching owner or any other person any estate or interest in any part of the adjoining land; or
b) creating in favour of the encroaching owner or any other person any easement over any part of the adjoining land;
or
c) giving the encroaching owner or any other person the right to retain possession of any part of the adjoining land
3) Where the Court makes an order under this section the Court may, in the order, declare any estate or interest so vested to
be free from any mortgage or other encumbrance affecting the adjoining land, or vary, to such extent as it considers
necessary in the circumstances, any mortgage, lease, or contract affecting or relating to that piece of land.
4) An order under this section, or any provision of the order, may be made upon, and subject to such terms and conditions, as
the Court thinks fit, whether as to the payment by the encroaching owner or any other person of any sum or sums of money,
or the execution by the encroaching owner or any other person of any mortgage, lease, easement, contract or other
instrument, or otherwise.
5) Every person having any estate or interest in the adjoining land or in the adjoining land of the encroaching owner, or
claiming to be a party to or to be entitled to any benefit under any mortgage, lease, contract, or easement affecting or
22
relating to any such land, is entitled to apply for an order in accordance with this section or to be heard in relation to any
application for or proposal to make any order under this section.
5B: For the purposes of subsection (5A), the Court may, if in its opinion notice of the application or proposal should be given
to any person referred to in subsection (5A), direct that such notice, as it thinks fit, shall be so given by such person as the
Court directs.
6) The Court shall not make an order under this section without the prior consent of the Western Australian Planning
Commission established under the Planning and Development Act 2005 and the local government of the district in which the
land to which the order will relate, lies.
7. For the purposes of this section building includes any structure and "land" includes the surface and the subsurface of and the
airspace above the land.
*s122 should be applied to partial encroachments and to situations where the remedy is an easement
S123 (applies to building and no other lasting’s of land)
1) Where (whether before or after the coming into operation of this Act) a person who has or had an estate or interest in any
piece of land (in this section referred to as the original piece of land) has, while he had that estate or interest, erected a
building on any other piece of land (that other piece together with any land reasonably required as curtilage and for access
to the building being in this section referred to as the piece of land wrongly built upon), if the building has been so erected
because of a mistake as to any boundary or as to the identity of the original piece of land, that person, or any other person
for the time being in possession of the building or having an estate or interest in either the original piece of land or the piece
of land wrongly built upon, or any other person mentioned in subsection (6), may apply to the Court, whether in any action
or proceeding then pending or in progress and relating to the piece of land wrongly built upon or by an originating
summons, to make an order in accordance with this section.
2) If in the opinion of the Court it is just and equitable in the circumstances that relief should be granted tothe applicant or any
other person, the Court may if it thinks fit make an order:
a) Vesting the piece of land wrongly built upon in the person or persons specified in the order
b) Allowing any person or persons specified in the order to remove the building and any chattels and fixtures or any of
them from the piece of land wrongly built upon;
c) Where it allows possession of the building to any person or persons having an estate or interest in the piece of land
wrongly built upon, requiring all or any of the persons having an estate or interest in that piece of land to pay
compensation in respect of the building and other improvements to the piece of land wrongly built upon to such
person or persons as the Court may specify in the order;
d) d. Giving the person who erected the building or any person or persons claiming through him the right to
possession of the piece of land wrongly built upon for such period and on such terms and conditions as the Court
may specify in the order.
3) Where appropriate, the Court may make any such order without ordering the applicant or any other person to give up
possession of the piece of land wrongly built upon, or to pay damages, and without granting an injunction
4) Where the Court makes any order under this section, the Court may, in the order, declare any estate or interest in the piece
of land wrongly built upon to be free from any mortgage, lease, easement, or other encumbrance affecting that piece of
land, or vary, to such extent as it considers necessary in the circumstances, any mortgage, lease, easement, contract, or
other instrument affecting or relating to that piece of land
5) Any order under this section, or any provision of the order, may be made upon and subject to such terms and conditions as
the Court thinks fit, whether as to the payment by any person of any sum or sums of money, or the execution by any person
of any mortgage, lease, easement, contract, or other instrument, or otherwise
6) Every person for the time being in possession of the building or having any estate or interest in the piece of land wrongly
built upon or in the original piece of land, or claiming to be a party to or to be entitled to any benefit under any mortgage,
lease, easement, contract, or other instrument affecting or relating to any such land, and the local government concerned, is
entitled to apply for an order in accordance with this section, or to be heard in relation to any application for or proposal to
make any order under this section
7) For the purposes of subsection (6) the Court may if in its opinion notice of the application or proposal should be given to any
person, whether referred to in that subsection or not, direct that such notice as it thinks fit to be so given by such persons as
the Court directs.
8) The Court shall not make an order under this section, other than an order under subsection (2)(b), without the prior consent
of the Western Australian Planning Commission established under the Planning and Development Act 2005, and the local
government of the district in which the land to which the order will relate, lies.
23
*s123 enables an application to be made for relief where a lasting improvement is made on land, owned by another person, in
the mistaken belief that it is your land. If the court thinks it is just and equitable, they may make one of the above orders (no
minimum compensation specified in WA)
Ex parte Van Achterberg [1984] 1 Qd R 160 at 164 (comments in relation to the equivalent Queensland provision)


Case concerned the encroachment of a building on adjacent land
Court had to consider the meaning of building with reference to s183/s184 of the Queensland act
Carter J (application of these provisions)  “…the loss of land which would be incurred by the adjacent owner cannot be
adequately compensated by the payment of monetary compensation… The Act does not appear to me to be designed to enable
one landowner to acquire rights over the land of his neighbour against his neighbour’s will, without sufficient reason …The result
of the orders I propose may cause some measure of inconvenience…No sufficient reason has been shown in this case why the
adjacent owner should be required to enlarge the property rights of the encroaching owner whether by grant of an easement
over his land or by a transfer of part of it.”

Act is not designed to allow one landowner to acquire rights over the land of a neighbour against a neighbour’s will,
without sufficient reason
If the court is going to enlarge the property rights of an encroaching owner, by way of making an order such as a transfer of land
or a grant of an easement, then sufficient reasons will need to be advanced to the court as to why this should be the case.
6. Crops and Trees
• Common law draws a distinction between Fructus Industrials and Fructus Naturales
1. Fructus Industrials  Annual crops requiring periodic labour for their production = chattels
2. Fructus Naturales  Crops and trees that are a natural produce of the soil, and crops not requiring annual
sewing e.g. Fruit trees = part of the land
 Where there is no immediate severance and plants remain in the soil, creates interest in land
 Marshall v Green (1875) 1 CPD 35  A sale which requires immediate severance constitutes a sale of
goods
 Cth v NSW (1923) 33 CLR 1
 Masters v Pollie (1620) 2 Roll Rep 141
i. Trees belong to the person on whose land they are planted.
ii. Where a tree grows on the boundary it is to be owned by both landowners as tenants in
common (co-ownership)
iii. Co-ownership of a tree may be separated from co-ownership of the land which the tree is
growing therefore you can own trees which grow upon the land of another.
3. Trees
 Marshall v Green (1875) 1 CPD 35
 Masters v Pollie (1620) 2 Roll Rep 141
Funeral Monuments  At common law, ownership is a separate form of soil
24
Tenure And Estates (Topic 3)
The Doctrine of Tenure
Doctrine of Tenure: Title is ultimately vested in the Crown, explaining the quality of title in land.
1. The Mode of Holding or Occupying Land



This is different to goods.
No person except the Crown can be the absolute owner of the land. All land is ultimately vested in the Crown. The
possessor of land is merely the tenant. The manner of possession is called tenure and the extent of the interest is called
the estate.
All private landowners are tenants of the Crown.
North J: ‘Nowhere has modification and change marked the history of property law more clearly than in relation to the doctrine
of tenure. This doctrine was the first way in which the ownership of property was fragmented. It underpinned the feudal system
so that the land law reflected the social demands at the time.’ (WA v Ward)
2. Shape and Internal Consistency
Brennan J: Doctrine of tenure is part of the skeleton of principle that gives our law its shape and internal consistency (Mabo v
Qld (No 2) (1992) 175 CLR 1, 29, 45)


Doctrine of tenure is limited to land and does not apply to goods.
Owes its origins to feudal society.
3. English Legal History
Under the process of subinfeudation, the King gave land to his lords in exchange for fealty and promise of military service, where
the lords in turn gave out lesser interest in land to lesser tenants for their service etc.
Statute of Quia Emptores (1290): Prevented tenant alienating land while still retaining possession. Seller now relinquished all
rights, and prohibited subinfeudation so that the transfer of land was now entirely a commercial transaction.
Tenure Abolition Act (1660): This abolished most acts of tenure and replaced feudal obligations of military service with socage…
and standardized many forms of feudal land tenure.
4. Reception to Australia
The doctrine of tenure is part of the law in Australia, although many incidents of the doctrine based on a feudal society have no
current relevance.





Doctrine was affirmed by the privy council and subsequently confirmed that land was not allodial in Australia – i.e. there
could be no absolute ownership of land vested in a person (AG v Brown (1847) 2 SCR (NSW) 312)
o This case concerned the right of the crown to conserve minerals in land granted as the Crown was the holder of
all Australian land.
Title to all land granted remained with the Crown (Williams v AG (NSW) (1913) 16 CLR 404)
English law was applicable to the conditions of the infinite colony and as the population, wealth and commerce of the
colony increased, many rules and principles of English law which were unsuitable in its infancy were gradually attracted
(Cooper v Stuart (1889) App Cas 286)
Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141, 245
o Blackburn J: ‘On the foundation of NSW, every square inch of territory in the colony became the property of
the Crown and all titles, right and interests whatsoever in land which existed thereafter in subjects of the
Crown were the direct consequence of some grant from the Crown’
o The application of the futile doctrine of tenure in Australia was a consequence of the silent operation of
constitutional principles – settlers assumed the title of England.
o Doctrine of tenure has little practical impact on Australia today, showing why land cannot be fully owner and it
might be said that the modern landlord-tenant relationship in leases bares some resemblance to the early
tenorial relationships in feudal society.
o Until Mabo, it operated to prevent the recognition of native title.
Doctrine may ultimately be more meaningful in Australia as it is the basis of mineral ownership which often reserved
minerals in favour of the crown.
5. Titles, Rights and Interests

Doctrine of Escheat: Comes from the doctrine of tenure and causes land to revert to the crown on the failure of the airs
of the owner of land, or where an owner of land commits a felon causing the land to escheat.
25

Titles, rights and interests must therefore derive from the Crown. Any other previous interest were either not
proprietary interests or were extinguished by acquisition of title by the Crown.
6. Doctrine of Tenure after Mabo
Australian legal system could no longer explain all estates and interests in land by reference to the English doctrine of tenure
derived ultimately form the Crown.

The Crown acquires mere radical title to land which did not confer on the Crown absolute beneficial ownership of land
occupied by indigenous peoples.
Effectively, the court in Mabo recognised an exception to the vesting of all land in the Crown as absolute owner.
Doctrine of Estates
Doctrine of Estate: Person does not own land but merely an estate in it.



Estate: The right to possess land as a tenant for a period of time
The doctrine of estates focuses upon the segregation of individual interests in land according to the length of time they
are able to exist for
The doctrine permits the fragmentation of interests on a temporal basis.
Wa v Ward (2000) 70 ALR 159, 359, North J:


‘In essence, the doctrine of estates reflected the idea that a person should be able to have an interest in land giving rise
to a present right to possession while at the same time other person would have interests in the same land giving them
future rights to possession’.
In particular, the evolution of the doctrine of estates, property interests came to be fragmented on the basis of time’.
Estate as Rights to Possession and Enjoyments of the Land






As land is a permanent object, it is possible to create various interests in or restrictions on land, according to the
duration of time that an individual spends on the land.
The concern this has on the doctrine of estates is the individual character of the interest granted to each person taken
under a crown grant.
The term estate means: the fullest set of rights of enjoyment in land – ie the right of possession
An estate held is not the land itself but an abstract portion of ownership, the scope of which is determined by the
particular form it assumes and the length of time for which it is to exist.
Thus, an estate is in essence, a right to possession or enjoyment of land for a particular period of time – the manner in
which an estates duration is measured defines the nature of the estate.
Walsingham’s case (1573) 75 ER 805
o “The land itself is one thing, and the estate in the land is another thing, for an estate in land is a time in land, or
land for a time, and there are diversities of estates which are no more than diversities of time …”
o Ie. the doctrine determines who has what and when in relation to land.
Characteristics of all estates
1.
2.
They are interests of a defined duration.
They confer a right to possession of the land, or its rents and profits – either now or at some time in the future
o
Without understanding the estate that a client holds in land, then it is not possible to look at the rights that
the client has in relation to that land.
Classification of Estates
Estates are usually classified as freehold (fee simple, fee tail and life estates) and leasehold (less than freehold)
1. Freehold Estates





Held for an indefinite period of time
A freehold estate may be either a fee-simple or a life estate, as opposed to leasehold, where the estate is of an
uncertain duration
Most important type of freehold estate is the fee-simple estate Fee-Simple Estate
This is the greatest interest in land that one can have which is recognised by the common law
Wik v Qld (1996) 187 CLR 1, 176, Gummow J:
o “… the fee simple, as the largest estate known to the common law, confers the widest powers of enjoyment in
respect of all the advantages to be derived from the land itself and from anything found on it.”
26



Fee  indicates that the land can be inherited
Simple  denotes that it can be passed to heirs generally.
An interest in a fee-simple estate can be disposed of intervivos during the lifetime of the holder, or by will, and if the
holder dies in testate, then the estate will be distributed to the next of kin, in accordance with the administration act in
WA.
Gumana v Northern Territory (2007) 153 FCR 349, [83]
o “…an estate in fee simple is for almost all practical purposes the equivalent of full ownership of land and
confers…all rights of ownership save to the extent that any such right has been abrogated, qualified or varied
by statute, by the owner of the fee simple or by a predecessor in title…”
o It is important to remember that ultimately an estate in fee-simple is not full ownership of the land.
2. Fee-Tail Estate




Basically, the same as the fee-simple estate, but the rights of disposition were limited to specified lineal descendants.
Since 1 August 1969, s23 PLA 1969 abolished estates in fee-tail and any existing fee-tail were converted to fee simple
Life Estates
A life estate is created when an interest in land is granted to a person for life, ending upon the holders death.
Due to this, a life estate cannot be inherited.
3. Life Estates



A life estate is created when an interest in land is granted to a person for life, ending upon the holders death.
Due to this, a life estate cannot be inherited.
There are two categories of life-estates recognised at common law:
1. An estate pur autre vie – i.e. an estate for the life another

E.g. to A for the life of B – here, A is the tenant and B is the measuring life 

If A dies before B? A is able to leave A’s interest by will, which A’s beneficiaries then enjoy until B’s
death, and on intestacy, the usual administration rules apply.
2. Ordinary life estate – more common of the two and here the owner of the fee simple gives the estate to A for
life. A is both the estate and the measuring life – since no interest survives A’s life, this type of life estate is not
capable of inheritance.

Both fee-simple and life estates can be further divided into absolute determinable and conditional
interests
4. Leasehold Estates
These estates are less than a freehold estate and can be distinguished from a freehold estate in that the duration is certain or can
be rendered certain.

There are four main types of leasehold estates:
1. Fixed term: Lease for a fixed term of any period which expires at the end of the period – a fixed term of years.
 The basic rule is that the maximum duration of the lease must be certain at the time the lease is
entered into.
 Doesn’t matter that the lease can be determined before the end of the specified period.
 Lace v Chantler ([1944] KB 368) it was held that a lease of a dwelling house to the defendant for the
duration of the war did not create a good leasehold interest. The term when the agreement took
affect was uncertain and it was impossible to construe this tenancy as anything else such as a lease for
a long period e.g., 99 years.
 A fixed term lease will often provide for a monthly tenancy to occur if the tenant remains in
possession with the landlords’ consent, upon expiration of the fixed term.
2. Periodic tenancy: Here a lease continues until appropriate notice is given with the lease being created with
reference to any period of time e.g., yearly, monthly, weekly etc.
 If notice is not given to bring tenancy to an end, it then runs for that period again.
 The tenancy is regarded still as complying with the requirement of specified maximum duration, as it
is treated as being definite for that relevant period.
 Commonwealth Life Amalgamated Assurance v Anderson
 S71 PLA provides that no tenancy from year to year is implied by the payment of rent and this section
abolishes the common law rule of yearly periodic tenancies where rent was paid but there was no
agreement as to duration.

A periodic tenancy may be terminated with one month’s written notice by either party to the other
under s72 PLA 3.
3. Tenancy at will: Where there is no agreement as to the duration of the tenancy, a tenancy at will, can occur.
27
 Can be determined at any time by either party, subject to an appropriate packing up period.
 Lansdale v Menzies (1909) 9 CLR 89
 In this situation, the tenant occupies the land with the landlord’s consent – no rent is payable.
 The tenancy is terminated if the tenant dies or otherwise attempts to alienate their interest.
 If rent is paid, it may be converted to a periodic tenancy.
4. Tenancy at sufferance: Arises by operation of the law only.
 For example, a tenant is in possession of the land after the lease expires, and without either the
assent or dissent of the landlord.
 Anderson v Bowles ((1951) 84 CLR 310)
 Example of a sublease of premises without consent, with the sublessee holding over after a
certain date
5. Reversionary lease: Lease that will commence at some further time, but under s74 PLA, a term to take effect
more than 21 years from the date of the instrument is void.
5. Leasehold Estate in Equity

There are three basis for a leasehold estate in equity:
1.
2.
3.


Equitable Estoppel
 Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 2
Tenancy by ‘estoppel’/doctrine of disclaimer of title
 Here, each party is prevented from denying each other’s title, but each will be defeated by a third
party with a superior title.
 Bruton v London & Quadrant Trust [2000] 1 AC 406
Estoppel by convention
 Unconscionable to allow departure from the assumed existence of a lease.
 Heggies Bulkhaul Ltd v Global Minerals Aust Pty Ltd (2003) 59 NSWLR 312
The significance the distinction between leasehold estates at law, and leasehold estates in equity is major, particularly
for the rules required for a lease at law vs. how a lease can arise in equity.
This distinction will also be significant in relation to fundamental differences in effect between a lease at law, and an
equitable lease – particularly within priority disputes.
6. Creation and Transfer of Freehold Estates
Words of Limitation vs. Words of Purchase





At common law words of limitation were required for the creation of fee-simple estates
Words of limitation refers to the phrase used to define the estate conveyed.
Words of purchase ‘to A and his heirs’  ‘to A’ are the words of purchase, A is the person the conveyance is made to.
Words of limitation ‘to A and his heirs’  ‘and his heirs’ are words of limitation, since they indicate the type of estate
being conveyed ie. it must be a fee-simple, because heirs had no immediate interest.
To convey a fee-simple estate, the common law rules make it rather complicated.
o The common law rules have been modified in WA, the general aim being to presume that when a person
makes a disposition, he or she intends to dispose of the whole interest in the land, subject to any contrary
intention.
o Most land owned in WA is Torrens System land and where land is held under the Torrens System, words of
limitation are not necessary because the transfer of land act merely requires that the type of interest conveyed
is accurately described  s82 TLA.
28
WA Statutory Provisions
DISPOSITIONS INTER VIVOS
Fee simple
PLA Before 1 August 1969 – Common law requirements
To A and his heirs
After 1 August 1969 – WA, s 37(2)
As above and in addition to A in fee; to A in fee simple
After 1 August 1969 – WA, s 23(1)
To A and the heirs of his body and any other limitation which
would previously have created a fee tail.
WA, s37(1) – Disposition without words of limitation passes
the fee simple, or other the whole interest of the grantor,
subject to contrary intention.
To A. To A forever etc. (semble).
Fee Tail
Before 1 August 1969 – Common law requirements
To A and the heirs of his body or other words of procreation
After 1 August 1969 – WA, s 23(1)
Fees tail can no longer be created. Limitations which would
previously have created fees tail now create fee simple estates,
eg to A and the heirs of his body
Life estate
Before 1 August 1969 – Common law requirements
To A for life or by default, eg use of words inappropriate to
create fee simple or fee tail
After 1 August 1969 – WA, s 37(1)
Clear words showing an intention to create a life estate, eg to
A for life. Quaere to A in tail – s 23(1) does not operate. Does
s37(1)?
DISPOSITIONS BY WILL
Fee simple
After 4 July 1839 – Wills Act 1970 (WA), s26(e)
Fee tail
Before 1 August 1969 – Common law requirements
After 1 August 1969 – WA, s23(1) PLA
Life estate
After 4 July 1839 – Wills Act 1970 (WA), s26(e)
Disposition without words of limitation creates a fee simple
estate in the absence of a contrary intention.
Clear words showing an intention to create a fee tail, eg in A in
tail.
Fees tail can no longer be created. Limitations which would
previously have created fees tail now create fee simple estates,
eg to A in tail, to A and the heirs of his body.
Clear words showing an intention to create a life estate.

Unless a contrary intention appears by will, a disposition of property without words of limitation whether to a person
beneficially, or as executor or trustee, is construed as passing the whole of the estate or interest (s26(1)(e) Wills Act
1970 (WA)

A disposition of freehold land by deed to a person without words of limitation or any equivalent expression, passes to
the grantee the fee simple or other, the whole interest that the disposer had power to dispose of by deed in that land,
unless a contrary intention appears (s37(1) PLA)

Words of limitation are not required for Torrens Title land.
29
7. Conditional and Determinable Interests
Both fee simple and life estates can be further limited by division into the following three categories
1.
Absolute interests
 This is the most common
 A fee-simple absolute is an interest which is perpetual and not determined by any special event
2.
Determinable interests




3.
This is an interest which will automatically determine on the happening or non-happening of some specified
event
Eg. G grants to A and his heirs until B marries. As long a B is alive, A has a determinable interest with a
possibility that when B marries, the estate returns to G – this is known as the possibility of reverta
If the determining vent becomes impossible, eg. B dies without having married, then the feesimple becomes
absolute in A, and the possibility of reverta is destroyed
Words such as ‘while’, ‘as long as’, ‘until’, ‘during’  tend to suggest a determinable interest, rather than a
conditional interest – determinable interest and life interest are used in the form of protective trusts
Conditional interests





Condition of an estate which has a condition subsequent attached to where by the grantees interest may be
cut short
Eg. conveyance by G to A and his heirs, on the condition A does not marry B here, A has a fee-simple estate
which A may lose if A marries B and G exercises rights of re-entry. A’s interest does not automatically
determine, rather, it is simply lost to G when G exercises his right of re-entry.
A conditional fee is a fee-simple that may be determined by the deliberate choice of the grantor on the
happening of a specified event o If the terminating event is an integral and necessary part of the formula from
which the size of the interest is to be ascertained, the result is the creation of the determinable interest.
BUT, If the terminating event is external to the limitation, if it is a divided clause from the grant, the interest
granted is the interest upon a condition.
The use of the words such as ‘on condition that’, ‘provided that’, ‘but if’ tend to suggest the creation of A
conditional interest.
In essence, a conditional fee is a fee simple that may be determined by the deliberate choice of the grantor on the happening of
a specified event. If the terminating event is an integral and necessary part of the formula from which the size of the interest is
to be ascertained, the result is the creation of the determinable interest; but if the terminating event is external to the limitation,
if it is a divided clause from the grant, the interest granted is the interest upon a condition.” (Cheshire & Burn, Modern Law of
Real Property) (Hyde v Holland [2003] NSWSC 733)
Distinguishing the difference between a determinable and conditional interest
Example 1: Imagine that there is a devise of land to a university in fee-simple, until the university ceases to publish its teaching
scores this creates a determinable fee
Example 2: There is a devise of land to a university of free simple, on condition that the university publishes its teaching scores
each year  this creates a fee-simple defeasible, by condition subsequent

Determinable and conditional fees differ both in their legal effect and in the words used to create them.
Ownership of determinable and conditional fees




Ownership of both determinable and conditional fees may be alienated in the same way as a fee-simple absolute, with
the transferee taking subject to the possibility of reverta, in the case of a determinable interest, or the right of re-entry,
in the case of a conditional interest.
Both determinable and conditional interests are created by attaching limiting events – ie. determinable events or
conditions
Common limiting events are those involving:
o Restraints on marriage
o Bankruptcy (conditional upon not becoming bankrupt)
o Restraints on alienation
For a limiting event to be valid, the event must not be void – a limiting event may be void for reasons of public policy in
any of the following situations.
30
8. Limiting events void by public policy
1.
The condition is conducive to immoral behaviour
Zappateal v Wright [1957] Tas SR 211
Facts:
 W was the registered proprietor of land. He was married but he lived with a person described as a concubine
(Zappateal)
 It was agreed between W and Z that she would acquire a beneficial interest in the land as a gift – the gift
subject to the condition that she would lose her interest if she ever left W
 Z left W and brought an action for sale and division of the proceeds of the sale
 Z had borne the man W two children ad had made substantial contributions to household expenses
Issue: Was the gift a conditional or determinable interest?
Held:
 This was a condition that was a condition subsequent to the gift of the land and the court distinguished
between two types of conditional interests:
i. Condition precedent ie. a requirement that the grantor must be satisfied before the grantee receives
an interest.
ii. Condition subsequent, which if not met in the future will terminate the interest • The condition
subsequent here was the continuation of an immoral relationship, and this was void because it was
contrary to public policy.
 Due to this illegality, the condition therefore had no effect, leaving the gift to Z intact.
 The condition subsequent was void, as it was interpreted by the court as prolonging an immoral cohabitation
between Z and W
 Interestingly, if the condition had been framed as a limitation on the estate granted, i.e.. Z held the interest
while she remained with W, the voiding of the condition would have destroyed Z’s interest
 Illustrates that where a limiting event forms part of a determinable interest, a void limiting event destroys the
whole estate granted, but in the case of a limiting event attached to a conditional interest, a void condition
simply makes the estate granted absolute.
 If a condition subsequent is void, the primary gift remains valid – but if a determinable limitation is void, the
gift fails entirely
Andrews v Parker [1973] Qd R 93  what may have once been regarded as public policy, is not now.
 An agreement to give an interest by gift, defeasible by a condition subsequent, ie. that the house be
retransferred to the plaintiff, upon the defendant returning to her own husband, was not void for immorality.
 The object here was not to induce the defendant to live apart from her husband, but simply to provide for the
termination of a relationship.
Facts:





The male plaintiff and female defendant (married woman) commended living together as man and wife in a
house which was owned by the plaintiff.
Subsequently, at the defendants urging, the plaintiff agreed to transfer ownership of the house to her on
condition that if she ever returned to her husband, she would retransfer ownership of the house to the plaintiff
After ownership was transferred to her, the defendant and her allegedly estranged husband, saw each other
more and more to the point where the relationship between the plaintiff and the defendant ceased and shortly
afterwards, the defendant’s husband moved into the house
Defendant asked the plaintiff to leave, and at another time, told the plaintiff he was not the first man taken for
everything he had.
Plaintiff left the house but in proceedings the plaintiff sought to recover title to the property
Outcome:



Court found that the agreement between the parties was not one to bring about extra-marital cohabitation, or
an immoral association, for that state already existed
It was simply to provide what was to happen on the ending of the relationship by providing for return of the
property to the plaintiff when and if the defendant returned to a state of lawful co-habitation with her actual
husband
Even if the agreement were based on an immoral consideration, the court said that the immorality was not
such according to the current standard for community as to deprive the plaintiff of a right to enforce it
31

2.
On the facts, if the contract were illegal, the parties were not impari delicto and it was not in accord with the
public interest or public policy that the defendant should retain the property which she had obtained through a
deceitful course of conduct.
Condition is void on the grounds of illegality.


For example, it may seek to frustrate the law of insolvency or intestacy.
Due to the strict construction of provisions, courts require precise wording in a limiting event, although
extrinsic evidence may be used to clarify the testator’s intention.
Caboche v Ramsay (1993-1994) 27 ATR 479



Allan Bond’s superannuation deed provided that his benefits granted were absolutely forfeited if Bond went
into bankruptcy.
The court held that this was an invalid condition as a restraint upon alienation of property.
Interestingly, the courts have since been more liberal with a limiting event which is determinable, rather than
conditional.
Re Leach [1912] 2 Ch 422




A clause which was a grant to A until he shall become bankrupt, was a determinable interest – the estate
ceasing automatically upon bankruptcy.
As no property was capable of passing to the trustee upon bankruptcy, the limiting event was not void
The limitation was valid as it set out the absolute bounds of the estate.
Some limiting events are void as conditional but valid as determinable events – even determinable events can
however be void for public policy reasons.
Re Machu (1882) 21 Ch D 838  condition attempting to exclude bankruptcy from laws





3.
Testator devised a freehold estate to the use of his daughter, her heirs and assigns for her separate use.
Subject to the proviso contained for determining her estate and interest in the event.
In a subsequent part of the will, there was a proviso that if the said daughter should at any time be declared
bankrupt, then the device therefore and before was void, and the land should there for go and be with for the
use of her children.
The court held that this device did not operate as a conditional limitation and that the condition in the proviso
was void for repugnancy, and accordingly that the daughter was entitled to the property for an absolute estate
in fee simple.
Due to the strict construction of conditions, courts require precise wording in a limiting event, although
extrinsic evidence can be used to clarify the testator’s intention.
Void for uncertainty
Clayton v Ramsden [1943] AC 320




A testator who gave a legacy and a share of residue to an unmarried daughter which he settled on her and her
issue, provided in his will that if she should at any time, after his death, marry a person not of Jewish parentage
and of the Jewish faith, the trusts, powers and provisions in her favour and her issue and any husband so
married to her should cease in determine and this will should operate as if she had died as at the date of the
marriage
The testator, having died, the daughter married a man who was not of Jewish parentage or faith.
The court held that, on construction, there was one condition of forfeiture and not two alternative conditions,
so that the conditions would be void as a whole if one limb of it were void.
The first limb of Jewish parentage was void for uncertainty and the second limb as to Jewish faith was void.
Re Tepper’s Will Trusts [1987] 1 Ch 358


4.
Demonstrates that intrinsic evidence can be used to clarify a testator intention.
In this case, what the testator ascribed to the meaning, the Jewish faith, when you use those words in his will.
Void for unduly restricting the right to marry.
32
Perrin v Lyon (1808) 9 Eat 170


A partial restraint on marriage may be valid.
In this case a partial restraint on marriage could be valid – a prohibition in this case on marriage to a Scotsman
was held to be valid.
Trustees of Church Property of the Diocese of Newcastle v Ebbeck (1960) 104 CLR 394

Condition which might ferment discord between spouses was invalid.
Facts:



A testator declared in his will that property left to his sons was on condition that, should his sons and their
wives, at the date of death of the testator, profess the protestant faith.
The will went on to provide that if, at the date of the death of the testator, the executives were not satisfied
that any of the sons or their wives professed the protestant faith, then in such case, that son and wife would
forfeit their share to which they would otherwise have been entitled.
Prior to the date of the will, two of the sons had married roman catholic wives and the third son was about to
marry a roman catholic wife, and subsequently did so.
Outcome:



The court held that these conditions were not void for uncertainty, but the conditions were found by a majority
to be void on the ground that they were contrary to public policy
The court said that the disposition created and opposition between the wives’ religious beliefs and a serious
temporal interest of her husband.
The court said the policy of the law was to preserve and maintain the institution of marriage, therefore these
conditions were void.
Ellaway v Lawson [2006] QSC 170

5.
Bequest conditional on beneficiary’s divorce valid
A limiting event which substantially restricts the grantee’s right of alienation






The limiting event must not take away the power of alienation, since the rights to sell is one of the
instances of ownership (bundle of right)
One cannot have a limiting event which states ‘to A provided, A does not sell the land’  that would
be void as a limiting event.
Re Dugdale ((1888) 38 Ch D 176), it was provided, ‘if my son commits any act by reason of which he
would be deprived of the personal beneficial enjoyment of the premises of his lifetime, then the
trust shall cease – held to be a general restraint on alienation and therefore void.
Partial restraints, however, may not offend the rule
i. E.g., to A on condition he never sells out of a family, was valid in Re Macleay ((1875) LR 20 Eq
186), but it is often difficult to find the principle on determining partial restraints on
certainty
In the case of (Trustees of Church Property of the Diocese of Newcastle v Ebbeck (1960) 104 CLR
394), the testator was leaving property to his sons, on condition that they and their wives were
protestants.
Elton v Cavill (No 2) (1994) 34 NSWLR 289  prohibition on alienation during lifetime is void.
9. Restraints on Alienation in Practice

These are rarely granted and more often found in covariance of an agreement.
Hall v Busst (1960) 104 CLR 206


B sold a small island to H the parties also signed a collateral agreement containing three essential terms:
1) H agreed not to sell the island without B’s consent
2) H would give B 1 months’ notice of intention to sell and during that month B would have the first option to buy
3) The price of purchase was fixed, ignoring possible market increase.
H later sold without observing any of the essential terms and B sued
33

HC held by majority that the first condition was void, being a restraint on alienation; that the price of purchase was fixed
ignoring possible market increases also made the final condition void for uncertainty.
Nullagine Investments Pty Ltd v WA Club [1992] WAR 386, and (1993) 177 CLR 635







Contractual restraints on alienation within covenants
The WA club agreed with a half land-owner that neither the club nor the owner would sell their interest in the building
without first offering it to the other at an agreed price – failing agreement, at 50% of the value of the land
Subsequently, the land owner of the club couldn’t agree on a price or value
The court held that the creation of a right of first refusal of the sale of a co-owners interest was not a restriction on
alienation, if it is not obliged to sell, and this right of pre-emption is enforceable as a contract
The clause merely created mutual rights of pre-emption, with the right to purchase at a current market value – it was
not a restraint on alienation
On appeal to the HC, it was subsequently upheld on different grounds
There is no sweeping approach that all contractual restraints on alienation are necessarily void
o Eg. consideration will be given to factors such as whether the restraint is limited in duration, does it protect a
valid co-lateral purpose etc
Vercorp Pty Ltd v Lin [2007] 2 Qd R 180 (valid) vs. Elton v Cavill (No 2) (1994) 34 NSWLR 289 (invalid)


In VL the defendant purchased land on terms to the effect that during the period of two years from the date of
purchase, he would not commence construction on the land of a house – should be intend to sell the land, he would
give notice of intention to H and upon an acceptance by H within 28 days, he would be bound to sell the land to H for
the price at which he purchased it
o The defendant gave this notice to H who then assigned to the plaintiff, its rights against the defendant o The
plaintiff sought performance of the contract.
o The defendant opposed the claim on the grounds that the rights were invalid as an enforceable restraint on
alienation.
o The court found for the plaintiff, stating that ‘as the terms in question created a right of pre-emption that was
limited in time, for a relatively short period, nominated a price effectively the same as that paid by the
defendant, affected land in the same state as when the land was originally land, and secured a proper colateral purpose, there enforcement was not prevented by the application of the rules with respect to restraint
on alienation
However, in EC, there was an agreement against alienation, except by consent.
o The court said that where real property is held by co-owners, a contractual restraint against alienation without
the consent of the other co-owners need not be invalid where it serves a proper co-lateral benefit, being a
legitimate interest in the co-owner having a vita on reasonable grounds over who should be an owner over
other undivided shares in the same property.
o However, a valid co-lateral object needs to be considered in connection with any invalid or illegitimate lateral
objects, which the restraint in question is likely to protect or achieve o Here the clause was an invalid
restriction on alienation.
Future Interests
Success of interests on land  give each holder of the interest an immediate right to possession, or to postpone that right until
some earlier interest has ended or some condition has been fulfilled
Future interest on land  Where the right to possession is postponed eg. ‘To Jack, when he attains the age of 21’

Future interests can be created under the Torrens System, s84 TLA  note that legal contingent remainders are very
rarely used.
1. Types of Recognized Future Interests
All freehold estates may be held in possession, or in reversion, or in remainder.
1.
2.
3.
In Possession: A present right to possession and is not accordingly a future interest.
In Reversion: A reversion is a residue of the grantor’s interest after a lesser interest in possession is granted.
o Eg. B gives to A for life  B has a reversionary interest ie. A present right to future enjoyment upon A’s death
In Remainder: This is essentially the grant of a future interest to a person to a person who was not previously entitled to
the estate – it is that part disposed of in the grant which is postponed to take effect on termination of the earlier
possessory estate
o Eg. A fee simple to A for life, and then to B and his heirs  A has a life estate in possession, and B has a feesimple in remainder (there is usually a remainder in fee-simple, fee-tail and life estates)
34
The easiest way to distinguish between reversions and remainders is that with reversions, the right of possession is returned to
the grantor.
Future Interests may be either:
1.
Vested: An interest that takes effect in possession, whereas a contingent interest may never fall into possession. An
interest is a vested interest if two requirements are satisfied:
o The identity of the individual receiving the interest is know.
o There is no precondition which prevents the interest from falling into possession, other than determination of
a life estate
Eg. a gift by X to Y for life and then to Z in fee simple  here, Z is identifiable, and if Z dies, his interest passes
by will or the rules of intestacy
2.
Contingent: This may never fall into possession  A gift by X to Y for life, and then to Z in fee simple, if Z reaches 21 
here, assuming Z has not reached 21, gives Z a contingent remainder; if Z dies before reaching 21, Z interest will not
pass
This difference becomes critical when applying the rule against perpetuities Sometimes it becomes unclear whether the
grantor intended to create a vested of contingent interest, however, legal contingent interests are rarely used today so
this is not as important.
2. Future Interests and The Common Law
The common law developed 4 strict rules relating to the establishment of legal remainder:
a)
Remainder is void unless supported by a particular estate.
o To X’s first daughter is void if X did not have a daughter at the time of the grant
b) Remainder after a fee simple is void, since the fee simple is the largest grant possible
c) Remainder is void if designed to take effect in possession by defeating the particular estate.
o To A, a widow for life, provided she does not remarry, and then to B  this is void at common law, because the
only person who can take advantage of a broken condition is the grantor – a remainder after a conditional life
interest is void.
d) Remainder is void if it fails to vest during the continuance of the particular estate, or at the moment of its
determination.
o Would be void to say, to my husband for life, the remainder to my children who graduate in law after his death
These 4 rules are of limited application to future interests, they effect:



Only legal future interests; and
Contingent but not vested interests; and
Remainders not reversions
Legal Contingent Remainders


Legal contingent reminders remain vulnerable to destruction, either naturally, or when the prior particular estate was
determined artificially, by surrender, merger, forfeiture or disclaimer.
In any event, the rules of natural and artificial destruction of legal contingent remainders have been abolished by s26
PLA
3. Fragmentation between Legal and Beneficial Ownership


The doctrine of tenure and estates became less satisfactory as feudal society receded – eg. the free hold estate could
not be devised by will, and passed to the eldest son.
To get around the restrictions posed by the common law, courts of equity recognized through use, a distinction between
legal and beneficial interests in land; the use involved A conveying land to B for the benefit of A and his heirs  here, A
had the legal estate but B retains a beneficial interests o The difference of legal and beneficial interest resulted in the
development of the trust
4. Trust



A trust gives a legal interest to the trustee, and an equitable interest or beneficial interest to the beneficiary.
The trustee has a right in property of the trust and the beneficiary has a right of personam against the trustee.
No special form of words is necessary to create a trust if that intention can be shown or inferred – but the words used
must be imperative and the subject matter of the trusts and the objects or persons intended to have the benefit of the
trust, must be certain.
35

Trustees Act 1962 (WA) governs rules relating to trustees.
5. Rules Against Perpetuities



This is designed to prevent the indefinite postponing of the investing of an interest in property and is now governed by
s101 PLA which provides a perpetuity or 80 years, or a life in being plus 21 years ie. The life of a person/s who exist at
the day of creation of the interest or in the case of wills, at the date of the testator’s death
This rule imposes a limit on the amount of time that may elapse between the creation of a future interest and the
vesting of that interest
Consequences in breaching this rule are found in s109 PLA, s103 PLA adopts a ‘Wait and See’ approach to decide if the
rule has been infringed
o
Consequences: Where a limitation is invalid as infringing the rule against perpetuities, any subsequent valid
limitation is thereby accelerated: s 109 (2) Property Law Act 1969 (WA)
o
‘Wait and See’: A limitation shall not be declared or treated as invalid, as infringing the rule against
perpetuities, unless and until it is certain that the interest that it creates cannot vest within the perpetuity
period or, if the limitation creates or confers a general power of appointment over or in connection with
property, that the power cannot become exercisable within the perpetuity period, but if the power becomes
exercisable, within that period, it is valid: s 103(1) Property Law Act 1969 (WA)
6. Rights of Owners of Freehold Estates
Owners’ estates in land  includes airspace above the land or soil beneath the land
Fee simple estates  generally confer the right of alienation, the right to things in, on or over the land and the right to create
lesser interests in the land e.g. a life estate
1. Rights and Obligations of Life Estates
A life tenant has a limited right to disposition of estates pur autre vie – in addition, a life tenant has a right to possession of the
property or its income but there is a need to balance the needs of the life tenant with the remainder man which is done through
the doctrine of waste
2. Doctrine of Waste
There are three types of waste at common law:
1.
Ameliorating waste
 This is where change is permitted if it increases the land’s value.
 Hockley v Rendell (1909) 11 WALR 170
o Tenant under a verbal lease on a weekly tenancy
o During the tenancy, he pulled down a shed in the yard of the leased land and some foul runs and reerected them on another portion of the leased land, using, in the new buildings, all of the materials of
the old buildings.
o At the end of the lease, the landlord commenced action in Fremantle to recover damages on account of
the alt4erations made by the tenant.
o Court held that the measure of damages was the amount of injury occasioned to the land and that if
removal and re-erection of the buildings had proved beneficial to the property, the plaintiff was not
entitled to recover any damages.
o The court also said that the measure of the damages was the injury done to the land, or the monetary
loss suffered by the landlord.
 In ameliorating waste, we have alterations to property which can improve the property.
 Here, an action for damages or an injunction will normally fail.
 Doherty v Allman (1878) 3 App Cas 709
o Premises is leased, they have fallen into disrepair, and it has become necessary to repair them.
o The tenants thought it would be beneficial to convert the store buildings into dwelling houses, which
would much increase their value, and was proceeding to convert them when their landlord filed action
to restrain them, alleging waste.
o The court held that this was not the case of enforcing a negative covenant – the waste alleged here was
ameliorating waste and that under the circumstances, the court, in the due exercise of its discretion,
refused to interfere by way of an injunction.
 The problem with this is, how do we define what an improvement means?
2. Permissive waste

This is a failure to do that which ought to be done.
36



Eg. the life tenant fails to keep land in satisfactory state of repair – the life tenant will only be liable if the instrument
creating the life estate imposes an obligation to repair on the life tenant.
Re Cartwright (1889) 41 Ch D 532
o Held that the estate of a legal tenant for life was not liable for permissive waste, since there was no expressed
duty to repaid under the imposed will, by which the estate was derived.
Brian Stevens Pty Ltd v Clark (1965) 83 WN (NSW) 33
o An action for waste was brought by a landlord against a former tenant.
o The court held that an action for waste would not lie unless the acts of the tenant were waste per se, and to
constitute waste there must be an alteration in the nature of character of the land to the prejudice the person
entitled to the remainder or reversion.
o In this case, the acts and omissions of the defendant did not constitute waste.
3. Voluntary waste


This is doing something harmful; doing something that ought not to be done; a positive act causing injury to the land
Woodhouse v Walker ((1885) QBD 404)/ Crocombe v Pine Forests of Australia ((2005) 219 ALR 692)
 The life tenant is liable for voluntary waste, unless the instrument creating the life tenancy exempts the life tenant
from liability for waste.
Equitable Waste



Since, at common law, a life tenant unimpeachable for waste, was free to do what they wished to do with the land,
equity developed the doctrine of equitable waste.
This involves a life tenant being restrained from unconscionably exercising their legal rights to the prejudice of the
remainder man, and this was established in Vane v Lord Barnard (1716) 23 ER 1082
o The father was a life tenant of a manner house, and the son was the remainder man o Father stripped the
manner house of lead, iron, glass, doors, floorboards.
o The father was unimpeachable for waste at common law o Court held that, despite this, the court would not
allow want in destruction, so the father had to repair the manner house and was to be restrained from any
further such acts.
Today, equitable waste can be found under s17 PLA:
o ‘An estate for life, without impeachment of waste, does not confer upon the tenant for life any legal right to
commit waste of the description known as equitable waste, unless an intention to confer that right expressly
appears by the instrument creating that estate’.
Remedies: Damages for injury to the land or damages in conversion for objects taken from the land
Native Title (Topic 3.5)
What is Native Title
Native title is ‘… a right which has its origins in the traditional laws acknowledged and the customs observed by the Indigenous
people who possess the native title. Native title is neither an institution of the common law nor a form of common law tenure
but is recognised by the common law. Here is, therefore, an intersection of traditional laws and customs [by the indigenous
peoples] with the common law’ (Fejo v Northern Territory (1988) 195 CLR 96, 128)
‘Native title has its origins in and is given content by the traditional laws acknowledged by and the traditional customs observed
by the indigenous inhabitants of a territory. The nature an incidence of native title must be ascertained as a matter of fact by
reference to those laws and customs’ (Mabo v Qld (No 2) (1992) 175 CLR 1, 58 (Brennan J))
• This demonstrates the intersection of the traditional laws and customs with the common law
1. Doctrine of Native Title and Tenure
Native title does not abolish the skeletal principles of the doctrine of tenure:



It is too late in the day to contemplate a new system of land ownership
He introduced a new and radical notion, disturbing the previous attempts of the Australian legal system to explain all
the states and interests inland by reference to the English doctrine of tenure, derived ultimately from the sovereign
Brennan CJ: “It is not surprising that the fiction that land granted by the Crown had been beneficially owned by the
Crown was translated to the colonies and that crown grants should be seen as the foundation of the doctrine of tenure
which is an essential principle of our land law. It is far too late in the day to contemplate an allodial or other system of
land ownership. Land in Australia which has been granted by the Crown is held on a tenure of some kind and the titles
acquired under the accepted law cannot be disturbed … if the land were desert and uninhabited, truly a terra nullius,
37
the Crown would take an absolute beneficial title (an allodial title) to the land…there would be no other proprietor. But
if the land were occupied by Indigenous inhabitants and their rights and interests in the land are recognised by the
common law, the radical title which is acquired with the acquisition of sovereignty cannot itself be taken to confer an
absolute beneficial title to the occupied land…” (Mabo v Qld (No 2) (1992) 175 CLR 1, [49])
o From this case, we see a recognition that if land were occupied by indigenous inhabitancy and their rights and
interests in the land were capable of being recognised by the common law, then what was acquired by the
crown was not absolute title, but a radical title
o Radical title was a postulate of the doctrine of tenure, the crowns radical title would be burden by native title
rights, Although, these rights could be extinguished
o Recognition of native title therefore involved a rejection of the doctrine that Australia was terra nullius (ie that
the land belonged to no one at the time of European settlement
1. Before Mabo v Qld (No 2) (1992) 175 CLR 1


Before title was recognised, all estates and interests in land were explained by reference to the English doctrine of
tenure derived ultimately from the sovereign (Wik Peoples v Qld (1996) 187 CLR 1 (the “Pastoral Leases” case)
Blackburn J: Because of adherence to the doctrine of tenure as conferring absolute ownership in the crown of land, we
see that native title was not in the nature of a proprietary interest and could not be recognised (bundle of rights theory
applied) (Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141, 272 – 273
2. After Mabo v Qld (No 2) (1992) 175 CLR 1


Recognition that it was erroneous to explain all interests that might exist in land by reference to the English doctrine of
tenure – instead native title was an interest in land existing outside of that doctrine.
Origins of native title are the traditional laws and interests of Indigenous Peoples and therefore the nature and
incidence of native title ascertained as a matter of fact by reference to those laws and customs Mabo introduced a new
and radical notion. This was that by the doctrine of tenure, the Crown acquired a radical title to land but this did not
confer absolute beneficial ownership of land occupied by the encumbrance of native title (unless native title had been
extinguished such as to transform radical title into an absolute beneficial title) Doctrine of tenure did not therefore
apply to the rights and interests which do not owe their existence to a Crown grant  See Pastoral Leases case
1. Native Title Act
Native Title Act 1993 (Cth)


Native title is now founded upon statute since Parliament’s intention to codify the common law elements of native title
(Members of the Yorta Yorta Aboriginal Community v Vic (2002) 214 CLR 22, [314] (Gleeson Cj, Gummow, Hayne JJ)
Purpose of this act was to include the statutory recognition and determination of native title. The validation of ‘past
acts’ and ‘intermediate period acts’, provisions for a future Act regime, and compensation provisions
3 Elements of Statutory Native Title
1.
2.
3.
The interests found their source in traditional laws and customs, not in the common law; and
The traditional rights and interests had a connection with the claimed land or waters; and
The rights and interest in relation to the claimed land were recognised by the common law 10.3 S223 Common Law
Rights and Interests.
1) The expression native title or native title rights and interests means the communal, group or individual rights and interests
of Aboriginal peoples or Torres Strait Islanders in relation to land or waters, where:
a) The rights and interests are possessed under the traditional laws acknowledged, and the traditional customs observed,
by the Aboriginal peoples or Torres Strait Islanders; and
b) The Aboriginal peoples or Torres Strait Islanders, by those laws and customs, have a connection with the land or waters;
and
c) The rights and interests are recognised by the common law of Australia (hunting, gathering and fishing is covered)
2) Without limiting subsection (1), rights and interests in that subsection includes hunting, gathering or fishing, rights and
interests
3) Rights and interests by the common law
Because of the focus on the traditional laws and customs this means that there is significant attention given to the evidence of
indigenous witnesses: Sampi v WA (2010) 266 ALR 537, [48]
38
Elements 1 & 2: Traditional Laws and Customs with Connection to Land or Waters
These are the laws and customs observed by the ancestors of the claimants at the time of sovereignty
Yorta Yorta Aboriginal Community v Vic (2002) 214 CLR 422, 86
Gleeson CJ, Gummow, Hayne JJ: “…the connection which the peoples concerned have with the land or waters must be shown to
be a connection by the traditional laws and customs … traditional in this context must be understood to refer to the body of law
and customs acknowledged and observed by the ancestors of the claimants at the time of sovereignty.”






The traditional laws and customs must have their origins prior to British sovereignty and that society must continue to
exist otherwise the communal connection to the land will be lost
It was the failure to prove a continuous connection with the land in accordance with traditional laws and customs which
was fatal to the claim of the Yorta Yorta peoples demonstrating a very onerous burden of proof that is imposed upon
native title
Only native title of rights or interests exist in pre-sovereignty can bind the new sovereign order – laws and customs can
only be traditional where they are sourced in a pre-sovereignty indigenous social system
Where the system has continued without being interrupted, the laws and customs to that indigenous society will retain
a traditional connection and satisfy these requirements
Problems becomes when society has been interrupted due to European settlement, therefore the laws and customs
may ceased to have continued existence and vitality – the society is no longer sourced in a pre-sovereignty normative
system
Frozen in time approach: Traditional laws and customs must have their origins before British sovereignty and the society
must have continued to exist (subject to any reasonable adaptations) to avoid loss of the traditional connection to the
land. Traditional laws and customs which post date sovereignty cannot be validated as native title. This imposes a high
evidentiary burden on claimants
Mabo v Qld (No 2) (1992) 175 CLR 1, 60
Brennan CJ: “When the tide of history has washed away any real acknowledgement of traditional law and any real
observance of traditional customs, the foundation of native title has disappeared. A native title which has ceased with
abandoning laws and customs based on tradition cannot be revived by contemporary recognition.”


Connection must be substantially maintained.
o Focus therefore will be on the continuity of laws and customs rather than the continuity of society or why
that continuity may have ceased.
o A link to the group which occupied the land in 1788 must be determined, normally by proof of biological
descent or by genealogies that show social recognition of kinship.
o Bodney v Bennell (2008) 167 FCR 84
 Full federal court find that a continuity enquiry must be focused on proving that the laws and
customs have continued substantially since pre-sovereignty.
Subsequent developments or variation will not extinguish native title where they do not otherwise diminish or
extinguish the connection to the land
o Banjima v WA (No 2) [2013] FCA 868, [399] (Barker J)
 Barker J: Maintaining a connection with a claimed area could be established despite interruptions
to practice of traditional laws and customs
 “In 1950/1960’s many Banjima people were obliged to leave their employment on pastoral
stations and commence living with their families, where their children were able to go to school.
This does not necessarily mean that the connection of the Banjima peoples with their traditional
country by the traditional laws and customs was substantially interrupted… They knew who they
were, they spoke their own language and they inculcated their children and grandchildren in the
traditional ways of the Banjima people. The practice of the Banjima peoples did no cease.”
 Need to consider interruptions in reference to all of the evidence o
o Risk v NT [2006] FCA 404
 An interruption which affects continuity of observance may be fatal
 This case illustrates that where interruptions effect the presence of a claimant in the area, and
where the interruption subsequently effects the observance and enjoyment of traditional laws
and customs, necessary connection required by the native title act will not exist
Other things to note in accordance with elements 1&2

There must be a consistent pattern of observance and acknowledgement of laws and customs (Jango v NT (2006) 152
FCR 150)
39


A traditional connection with the land does not require exclusive occupation, it may be spiritual (Daniel v WA [2003]
FCA 666, [422] (Nicholson J))
Claims do not need to be ‘common’ or ‘group’ rights, and may include individual rights which are part of the traditional
laws and customs: Murray on behalf of the Yilka Native Title Claimants v WA (No 5) [2016] FCA 752
Third Element: Recognition by the Common Law (s223(2)(c) NT


The rights and interests claimed by native title must be recognised by Australian Common Law
Three questions raised:
1. Are the rights and interests consistent with the framework of contemporary Australian Law? (WA c Ward (2002)
191 ALR 1)
 Native title would not extent to the protection of intellectual property rights associated with land, nor
would it extent to interests in minerals or petroleum
2.
The rights need not be capable of recognition by the common law at the time sovereignty was acquired (Cth v
Yamirr (2001) 208 CLR 1)
 Requirement that native title be recognised by the common law does not specify any past date at which
the recognition must arise.
 E.g., Native title could exist over coastal seas, even though the commonwealth did not assert sovereignty
over the 12-mile limit until 1990
3.
Has native title been validly extinguished by prior legislative or executive acts of government? If so, it cannot be
recognised at common law (Yanner v Eaton (1999) 201 CLR 351)
1. Content of Rights Recognised by Native Title
Native title content will vary in accordance with traditional laws, customs and usage:



Wik Peoples v Qld (1996) 187 CLR 1, 169 (Gummow J): “The content of native title, its nature and incidence, will vary
from one case to another. It may comprise what are classified as personal or communal usufructory rights involving
access to the area of land in question to hunt or gather food or to perform traditional ceremonies … at the opposite
extreme, the degree of attachment to the land may be such as to approximate that which would flow from a legal or
equitable estate therein.”
Even though native title is recognised by the common law, and alienation is one of the bundle of rights at common law,
there will be no alienability of native title accept as in accordance with indigenous peoples traditional laws and customs
Native title is sui-generous, unique to itself and outside of the common law doctrine of estates and tenure
Examples of rights that are included in native title:




Territorial seas – right to fish and navigate (Cth v Yarmirr (2001) 208 CLR 1)
Inland waters (Yanner v Eaton (1999) 201 CLR 351)
Right to trade for commercial purposes (Akiba v Cth (2013) 250 CLR 209)
Native title does not include the protection of intellectual property rights associated with land, nor minerals or
petroleum (WA v Ward (2002) 191 ALR 1)
2. Extinguishment of Native Title
The Native Title Act is now the primary source of the law on the extinguishment of native title, however, Mabo (Brennan J)
clearly anticipated the extinguishment of native title: ‘Where the Crown has validly alienated land by granting an interest that is
wholly or partially inconsistent with a continuing right to enjoy native title, native title is extinguished to the extent of the
inconsistency, thus native title has been extinguished by the grants of the state of free-hold or leasehold, but not necessarily by
the grants of lessee interests’



Mabo says that native title would be extinguished where the crown made a grant evincing a clear and plain
intention to confer a title where the legal incidents of that title were inconsistent with native title rights o Mabo did
not properly clarify the full scope and effect of extinguishment and as a result, we now look to the native title act
rather than common law.
It was assumed that all estates, both free-hold and non-free-hold, would be inconsistent with native title and therefore
extinguish it.
Common law extinguishment of native title was recognised in Mabo where there was a clear and plain intention to do
so by legislature or the executive. This could occur as follows:
40

Where legislation expressly extinguishes native title – inconsistency of incidents test
Wik Peoples v Qld (1996) 187 CLR 1
o
o



The test requires a comparison between the legal nature an incidence of the existing native title and of the
statutory grant. If native title rights cannot be exercised without infringing on rights created by the grant,
then native title rights will give way to the later grant, even if rights under the later grant have not been
exercised. Is the exercise of power inconsistent with the continued enjoyment of native title?
 Yes: then they can co-exist
 No: then native title rights give way to the grants
Although this test was applied, they concluded that a pastoral statutory lease issued by the crown did not
confer exclusive possession or created a lease extinguishing native title
Overall, native title grants are very vulnerable to the grant of inconsistent interest in land to the crown.
Eg. Grant of a free-hold estate will demonstrate plain and clear intention to extinguish native title, because the fee
simple includes a right to exclude others from the land.
On the test for determining whether legislation extinguishes native title in the absence of an express declaration, look at
Akiba Obh of Torres Strait Regional Seas Claim Group v Cth (2013) 250 CLR 209
 HCA focuses on whether extinguishment is a necessary implication of the legislation – limited regulatory provisions
re fishing not inconsistent with native title.
 Vulnerability of native title remains at risk to the exercise of the crown extensive powers to create inconsistent
interests with land or to appropriate land and use it in a manner inconsistent with the enjoyment of native title
 WA v Brown (2014) 306 ALR 168  conferral of a mining lease to joint venturers  found not to be wholly
inconsistent with native title rights.
o This was because the lease in issue did not give the joint ventures any rights of exclusive possession.
o Lease didn’t extinguish native title even though the rights that the joint venturers exercised took priority
over the rights of the native title holders during the period of exercise of the rights pursuant to the lease.
Extinguishment of Native Title under the NTA



Native title under the NTA is a bundle of rights and can be partially or wholly extinguished (WA v Ward (2002) 191 ALR 1
o Means that parts of this bundle can be extinguished
Native title cannot be extinguished contrary to the NTA s11(1) NTA and once extinguishment occurs, it is typically
permanent.
o Tjungarrayi v Western Australia; KN (deceased) and Others (Tjiwarl and Tjiwarl #2) v Western Australia
[2019] HCA 12, [1]
“Generally speaking, when native title rights and interests are extinguished the extinguishment is permanent”
However, in s47, s47A and s47B, there are some exceptions where native title can be revived in relation to vacant crown
land.
o Tjungarrayi v Western Australia; KN (deceased) and Others (Tjiwarl and Tjiwarl #2) v Western Australia
[2019] HCA 12, [1]
“Any historic extinguishment of native title rights and interests is to be "disregarded" for purposes of claim for
determination of native title rights and interests over vacant Crown land. Where any of s 47, s 47A or s 47B of
the Native Title Act 1993 (Cth) ("the NTA") applies, prior extinguishment of native title rights and interests”
Legislation after 1 July 1998



NTA was introduced partly with the aim of validating past crown grants and determining a protocol for dealing with
future act and setting up a regime for a determination of those claims
Following the decision in Mabo (No 2) it was thought by the commonwealth to enact legislation to secure the validity of
the past acts of the crown – in particular parliament was concerned about titles which had been issued without
reference to native title rights, thereby potential being in breach of the racial discrimination act
o S14 NTA provides for the validation of past commonwealth acts
o S19 NTA gives states and territories the authority to validate their past acts on the same terms
Legislation after 1 July 1993 may extinguish native title in accordance with the provisions of the NTA s11(2)
o See Div 2B of Part 2 on confirmation of the extinguishment by certain valid grants made by the Commonwealth
 Looking at past acts, the Crown grants prior to 1 Jan 1994, and legislation prior to 1 Jul 1993, as per
s228 NTA
41
o
Div 2 and 2A of Part 2 – validation of certain grants made between the period of the Racial Discrimination Act
1975 and the NTA
 Racial Discrimination Act requires all acts after 1975 which extinguish native title to be compensation
– from s17 and s240 from NTA, we see that past acts will not be made invalid merely because
compensation has not been addressed
o

Div 3 of Part 2 – the NTA sets out a regime for the regulation of all future grants or legislation over land
amenable to native title. To be valid, future acts must comply with the NTA and if they do not, they will not
extinguish or impair native title. The two main principles are non-discrimination and non-extinguishment
 Past acts will only have the effect of extinguishing native title where the act is a Category A act  this
is a grant of a free-hold estate etc
 Category B act  include all forms of lease-hold grants
 Validation of Cat B past acts will extinguish native title to the extent of any inconsistency
between the past acts and the native title (minor exceptions to this but these are the general
provisions)
 Category C  validates past act mining leases 
 Category D  validates all past acts not within Cat A – C
Excluding future acts, the NTA therefore provides for the retrospective validation of past land grants etc. Where the
states validate past acts, the native title holders must be compensated where they are adversely affected
Immediate Period Acts
 Following Mabo (No 2) it is widely assumed that native title will be extinguished by all leases whether it be the


common law or statutory – however this is not the case as of the Wik decision, where a statutory pastoral lease was
found not to automatically extinguish native title.
Between Mabo (No 2) and Wik, the NTA was amended to specifically validate these otherwise potentially invalid
land grants.
The effect of a validated intermediate period act on native title is similar to that of a past act.
Future Act Regime



A future act is any legislation enacted after 30 June 1993 or any legislation after 31 December 1993, but excluding
intermediate period acts (s233 NTA)
o Valid act: future act must comply with the administrative requirements under the native title act.
o Regulatory requirements regarding future acts apply two principles.
 Non-discrimination principle and non-extinguishable principle
o Future acts can be divided into permissible and non-permissible groups o Permissible future acts may be carried
out over land and water effected by native title and approved under the NTA, despite the existence of native title
(eg. Acts in relation to pastoral leases, acts that pass the free-hold test etc)
o Non-permissible acts are those that have not been specifically approved under the NTA.
Where native title claimants satisfy the registration test, they have procedural rights under the future act regime eg. The
right to negotiate and the right to access land.
Intermediate period acts: Validate grants that may have otherwise been invalid between 1993 and the Wik decision.
3. Compensation

Mabo (No 2) was held that no compensation was held prior to the Racial Discrimination Act 1975 (RDA), consequently the
RDA is now the main argument for compensation o S9/s10 RDA provide compensation to native title holders equal to that of
other title holders.
o S48-s54, the validation of past or intermediate period acts which extinguish native title generally give rise to
compensation
o
Permissible future acts not occurring through compulsory acquisition are also subject to compensation.
 The guiding principle for compensation is that it must be on just terms for any loss, diminution or other
effect of the act on native title rights (s51(1) NTA) Northern Territory v Mr A. Griffiths (deceased) and
Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples [2019] HCA 7) (“the Timber Creek” case)
 First assessment by the high court of compensation for extinguishment of native title, under NTA 1993,
where the criteria for assessing compensation following extinguishment by compulsory acquisition are
considered.
42


The scope of the just terms provided under the NTA are also considered.
Compensation for extinguishment requires an assessment of: o The economic value of the extinguished
Native Title rights and interests (with a discount to be applied where the Native Title in question is ‘nonexclusive’); and
o
Additionally, an estimation of any ‘non-economic or cultural losses caused to the native title holders by the relevant
extinguishing acts.
 It’s the recognition of non-economic or cultural loss being compensable that has brought the Timber Creak
case so much publicity.
 On procedure for compensation in WA, see Land Administration Act 1997, s156 etc 11.5 Contemporary
Native Title Developments in WA
 Can native title include exclusive access to WA beaches on the Middle Dampier Peninsular? (Manado on
behalf of the Bindunbur Native Title Claim Group v State of Western Australia [2018] FCAFC 238)
 The recognition of native title alongside financial award under an Indigenous Land Use Agreement o
Agreement providing an alternative to litigation on native title
o
Agreements aim is to offer native title claimants the opportunity to secure native title rights, which interestingly do
not depend upon the existence of native title however the force of the claim generally increases the bargaining
power of the parties.
 Native title and literature  N Hasluck: The Bradshaw Case (Arcadia, 2016)
Acquisition and Transfer of Proprietary Interests (Topic 4)
1. Legal and Equitable Interests in Land
Through the doctrine of estates, we see that interests in land may be fragmented on the basis of time. Interests in property may
also be fragmented in another sense where several parties hold co-existing or concurrent interests in the same object. Such
interests can be either of the same character, or of a different character. When different interests that can exist in the same
object, are considered, we are concerned with legal and equitable interests.
o
Legal interests in property are the interests recognised by the common law, where equitable interests are those
recognised by the Court of Chancery
o The common law recognises legal interests in land. The Courts of Chancery recognised equitable interests in land. We
are concerned with different interests that can exist in the same land.
o The principles of good conscience and natural justice are demonstrated by the maxims of equity. These aren’t rules of
law but rather principles which assist in the resolution of disputes. They are not able to be used as precedents.
o There are 20 maxims of equity.
1. Equity acts in personam
 Rights in Rem vs. Rights in Personam: A right in personam can be directed to a person (e.g. contract
law) and it is enforceable against the person who is privy to that relationship only.
2. Equity acts on the conscience
3. Equity will not suffer a wrong to be without a remedy.
4. Equity follows the law (although equity will prevail over the common law)
5. Equity looks to the intent rather than to the form.
6. Equity looks on that as done which ought to be done.
7. Equity imputes an intent to fulfil an obligation.
8. Equitable remedies are discretionary.
9. Delay defeats equity (Doctrine of Laches)
10. He who comes to equity must come with clean hands.
11. He who seeks equity must do equity.
12. Equity regards the balance of convenience
13. Where there are equal equities, the law prevails.
14. Where there are equal equities, the first in time prevails.
15. Equity, like nature, does nothing in vain.
16. Equity never wants a trustee.
17. Equity aids the vigilant
18. Equality is equity.
43
19. Equity will not assist a volunteer.
20. Equity will not promote a statute to be a cloak for fraud.
o
o
o
By the early 19th century, equity administered by the Court of Chancery, however, had become almost as fixed,
inflexible and rulebound by the common law. The rules of common law and equity were eventually fused in a court
system in 1873, in the UK. The last jurisdiction to do so was NSW in the 1970’s
It is important to establish the difference as the rules of transfer and creation differ, and the remedies available for
breach differ.
Legal interests are interests which are recognised and forced by the common law or statute, while equitable interests
are those recognised by the Court of Chancery.
Difference between Legal Interests and Equitable Interests



Equitable remedies are discretionary.
No equitable interest can exist in the absence of an equitable remedy (although this is no longer in an example such as a
beneficiary’s interest in estate pending administration of that estate)
Legal interests involve rights in rem, where equitable rights and interests involve rights in personam.
Similarities between Legal Interests and Equitable Interests



Remedies available are similar.
Both legal and equitable remedies and interests are enforceable between the parties
Both are proprietary interests.
o Example: Contract for the sale of land (one of the most common consensual transactions for the acquisition of
an interest in land)
o The steps involved for the contract in the sale of land are typically:
1. The signing of an offer and acceptance document by both parties
2. The purchaser’s payment of a deposit
3. The purchaser getting a loan from the bank.
4. The settlement of that purchase
2. Sale of Land Contracts
Formal Requirements for Contracts for the Sale of an Interest in Land
The acquiring of an interest in land often begins by the parties entering into a contract – under the law of contract, for there to
be a binding contract, there must be an offer, acceptance and consideration and the parties must also have capacity



In relation to contracts involving the sale of land, there are additional formal requirements – these are contained in
section 4 of the statute of fraud 1677, as amended in WA, Statute of Frauds Act 1962
Requirements imposed include:
“No action shall be brought upon any contract for the sale or other disposition of land or of any interest in land unless
an agreement upon which such action is brought or some memorandum or note thereof, is in writing and signed by the
party to be charged or by some person thereunto by him lawfully authorised.”
Subject to conditions precedent and subsequent, compliance with s4 of the Statue of Frauds, will create an equitable
interest in land.
Applying the Statute of Frauds


A contract for the sale of an interest in land must be evidenced in writing and a purely oral contract will be
unenforceable.
This leads to when, in fact, will there be a sufficient memorandum or note?
ANZ Banking Group Ltd v Widin (1990) 102 ALR 289
Facts:



ANZ lent money to Widin and took a mortgage as security of the loan.
Widin signed mortgage documentation and on authority gave the bank the authority to complete particulars i.e.. The
mortgage document was blank, had signed an authority giving the bank permission to complete necessary details.
Months later the mortgage was completed and date but by this time, Widin’s creditors had already brought bankruptcy
proceedings against Widin.
44
Issue: Was there a sufficient note or memorandum to support the existence of a mortgage at the time when the funds were
loaned? I.e. What was the date when the mortgage came into existence?
Outcome:






Court held that there was no sufficient note or memorandum to support the existence of a mortgage.
Court found that the statute of frauds is directed at excluding the direction of parole evidence or oral agreements.
In some cases, two or more documents may be read together to constitute a sufficient note or memorandum, such as
where one document refers to the other, either expressly or by necessary implication
While parole evidence may be given in the transaction, the documents signed must refer to the transaction for parole
evidence to be available.
Here, the mortgage document did not refer to any transaction or any other document and the authority to complete
was insufficient.
Oral evidence of the land from Bank employees, over which the mortgage was to be given, was inadmissible – it cannot
be used to correct a failure to comply with s4.
Lloyd v Lloyd [1964] WAR 219
Facts:






The defendants, who were the only persons entitled in distribution to land as part of an intestate estate, signed a
document addressed to the public trustee, as administrator of the estate
Document read: ‘Will you please sell the property described to Fredrick Lloyd (plaintiff), for 3300 pounds cash?’
Having received an offer of 4000 pounds, they wrote to the public trustee purporting to cancel the earlier instructions in
which they requested the trustee to sell, and he in turn wrote to the plaintiff advising that the defendants had
instructed him not to accept the plaintiff’s offer.
Plaintiff claims specific performance.
Judge found the defendants had agreed orally to sell the land to the plaintiff and had then approached the trustee to
give effect to the agreement, and that the plaintiff had been at all times willing and able to pay the price.
During oral negotiations the plaintiff had agreed that the grandfather of the descendants should be allowed to continue
to reside in the house on the land in question, until his death
Outcome:



Court held that the word ‘sell’ in the document, referred not to negotiations for sale but to actual sale.
Secondly, the court said that the agreement that the grandfather should be allowed to reside in the house until his
death, was not a substantial and material part of the bargain, but merely co-lateral to it
The failure to include it as a term in the written document did not make the contract unenforceable because of noncompliance with s4 of the Statute of Frauds Act, and there was therefore a sufficient memorandum for the purposes of
that section.
Effect of the Statute of Frauds




The Statute of Frauds makes a defective contract not invalid, but merely unenforceable.
Without a dispute, the lack of enforceability will not be of concern to the parties
Once an enforceable contract is entered into this will be sufficient to vest an equitable interest in the land to the
purchaser (HC in Brown v Heffer)
The vendor is treated as holding the land on trust for the purchaser – the purchaser now being the beneficial owner.
o The vendor retains the rights to possession until the purchase price is paid
Lysaght v Edwards (1876) 2 Ch D 499
Facts:



The plaintiff agreed to purchase land from the vendor and signed a contract of sale
After title was accepted, but before completion, the vendor died without any executed conveyance having been done
The vendors will left his personal estate to his executor and his real estate to H&M upon trust for sale and to H, all the
estate which on death, might be vested in him as trustee
Issue: Did the beneficiaries under the will have to proceed with the sale to the plaintiff?
Outcome:

The land initially passed to H, but as the vendor had established his title to the land prior to his death, and the plaintiff
had accepted the title, H held the title as constructive trustee for the plaintiff
45


“It appears to me that the effect of a contract of sale has been settled for more than two centuries … [T]he moment you
have a valid contract of sale, the vendor becomes in equity a trustee for the purchaser of the estate sold, and the
beneficial ownership passes to the purchaser.”
On the effect of the purchaser obtaining an equitable interest, Gessle J, said: “If anything happens to the estate
between the time of sale, and the time of completion of purchase, it is at the risk of the purchaser. If it is a house that is
sold, and the house is burnt down, the purchaser loses the house. He must insure it himself if he wants to provide
against such an accident. Therefore, while a vendor mist take reasonable care between sale and completion, any nonfault loss remains with the purchaser. The vendor retains a lien over the land until payment of the purchase price.”
Practical consequences from this case:


Rights obtained from entering into a contract are proprietary and the contract will survive the death of either party
Upon entering into a contract, the purchaser must complete irrespective of damage to the land afterwards
Siel Nominees v Vaac Insurance (1975) 180 CLR 173
Facts:



Plaintiff agreed by written contract, to buy land from the defendant, who had insured the land against damage by fire,
to which fire damaged the property and he directed his insurer to pay money to the plaintiff by written authority • The
defendant handed over this authority at settlement and the defendant also transferred to the plaintiff all his interests in
the insurance policy.
After settlement, the insurer refused to pay out the plaintiff.
Insurer was joined as a defendant in these proceedings.
Outcome:

The HC made 5 different findings:
o Upon an enforceable contract being signed for the sale of land, the purchaser must complete irrespective of
the destruction of improvements on the land.
o Upon signing the contract, the purchaser has an insurable interest which he can immediately protect by a
cover note of insurance.
o Vendor having a enforceable contract, is entitled to the full purchase price, notwithstanding the destruction
of improvements on the land
o When the vendor receives full payment of the purchase price, he receives no loss by destruction of the
improvements.
o The direction to the insurer came into force at the time of settlement, therefore because the vendor had
received payment of the purchase price at settlement, the vendor was not, and could not have become
entitled to receive any monies under the insurance policy; that he would not and could not suffer any loss
meant the signed direction to the insurer had no effect. The payment of the full purchase price provided the
insurer with a complete defence, because an insurance policy is a contract of indemnity.
Sackville v Nieve raises a question of how can a purchaser protect themselves from being required to buy a destroyed property.
In WA, this is now dealt with by the Real Estate Institute of WA: Joint Form of General Conditions for the Sale of Land 2018 and
provide a set of general conditions used in WA to sell land.
Practical Issues and Consequences



Risk passes to the purchaser.
Contractual rights survive the death of either party (Lloyd v Lloyd and Lysaght v Edwards)
Bunny Industries Ltd v FSW Enterprises [1982] Qd R 712
o Vendor signs two contracts and proceeds with the second contract.
o If this occurs, proceeds of sale will be held on trust for the first purchaser.
o Here, the plaintiff contracted to buy land from the first defendant, but the first defendant then contracted to
sell land to the second defendant, who upon registration of the transfer of the land, acquired legal title to
the land o Plaintiff argued that the first defendant held the purchase price on trust for the plaintiff.
o Court held, applying Lysaght v Edwards, that a specifically enforceable contract of sale confers an equitable
interest in the land in favour of the purchaser, although it is not absolutely necessary that specific
performance be available.
o Equity deems to be done what ought to be done, and therefore treated the contract with the plaintiff as
having been effectively influenced.
o Here, it was sufficient to show that an order for specific performance would have been available to the
plaintiff when he entered into the first defendants’ contract with the second defendant.
46


This principle applies to general law as well as Torrens Land
Conditions precedent or conditions subsequent
o It is not uncommon for a condition to attach to a contract.
o The condition may either be a condition precedent or condition subsequent.
o Condition Precedent: The contract does not come into existence until that condition is met.
o Condition Subsequent: The contract comes into existence, even before that condition subsequent may be
met.

Typical example is a subject to finance clause under a contract for the sale of land.
3. Part Performance and Equitable Estoppel
Recognition and Treatment of Equitable and Legal Interests
Walsh v Lonsdale (1882) 21 Ch D 9
Facts:




A lease was entered into which was for a weaving shed for 7 years with rent payable annually in advanced.
The parties intended a legal lease to be created by deed, but this never occurred.
The tenant (Walsh) took possession but paid rent quarterly in arrears, when it should have been paid annually in
advanced.
Lonsdale subsequently exercised the common law remedy of distress (which has since been abolished in WA) by
ceasing personal property of Walsh for unpaid rent
Issue: Was Lonsdale in a position to exercise a common law remedy for distress, when only an equitable lease had been created?
Outcome:





The court held that at law, Walsh was only a tenant at will therefore distress was not available as rent was being
paid albeit quarterly.
However, in equity, where there is an agreement for lease, which specifically enforceable under which possession
has been given, the tenant is treated as if a lease had been granted for the 7 years
Accordingly, Lonsdale was entitled to bring distress against Walsh, being entitled to exercise the same rights as if a
lease had been granted at law for the 7 years, and there are a number of reasons why.
As is pointed out by Sackville v Nieve, it cannot be assumed that an equitable lease is as good as a legal lease, just
because of the decision in Walsh v Lonsdale.
There are a number of reasons why:
1.
The court hearing the matter must have jurisdiction to grant equitable relief, although in WA, this is
resolved by the Supreme Court Act 1935 which vests the court with equitable jurisdiction (s25)
 An equitable lease requires the assistance of a court that is able and willing to order specific
performance – a court may decline specific performance where the client has entered into
possession but breaches a term of the lease
Chan v Cresdon:






Unregistered unequitable lease
Appellants guaranteed the lessees obligations to the lessor
The tenant took possession but failed to pay rent, so the landlords sued the guarantors
for the rent
Guarantors succeeded in avoiding payment as the guarantee was given in consideration
of the granting of the lease, however, because the legal requirements for the lease
hadn’t been satisfied, there was only a tenancy at will at common law, terminable by
one months’ notice. The obligation to pay rent under the tenancy will was not an
obligation arising under the lease
As between the lessor and lessee, the equitable lease or the equivalent of the lease at
law, but it did not establish liability of other parties such as guarantors
“the courts willingness to treat the agreement as a lease in equity, on the footing that
equity regards as done what ought to be done, and equity looks to the intent rather
than the form, rests upon the specific enforceability of the agreement
47
2.
3.
An agreement for a lease will be treated by the court administering equity as an equitable lease for a
term agreed upon and as between the parties as the equivalent as a lease at law, though the lessee
does not have a lease at law in the same sense as having a legal interest in the term.
HC suggests that having an equitable interest in land can exist where the plaintiff is entitled to
something less than a degree of specific performance, for example, general equitable relief.

The holder of a legal lease is not at risk of being defeated by a bonefidey purchase of a value,
in the same way as an unregistered lease at Torrens title land
Doctrine of Part Performance
Contract which fail to meet the requirements of a signed note or memorandum under s4 Statute of Frauds Act for the disposition
of the interest in land, may still be enforceable in equity under the doctrine of part performance, which seeks to mitigate the
harshness of the common law.


At common law, the principle was that title will pass provided that no action was brought, should a dispute arise.
The formal requirements for part performance were established in Madison v Alderson (1883) 8 App Cas 467
o The acts relied upon, unequivocally and of their own nature, refer to a contract or agreement
Elements of the Doctrine of Part Performance
1.
2.
3.
4.
The parties must have arrived at a concluded agreement.
The plaintiff on faith of the agreement must have performance acts that were either encouraged by the agreement or
else both permitted by it or encouraged by the defendant. And in consequence, the plaintiff must have altered his
position to such an extent that it would be inequitable to allow the defendant to plead that the contract was not
evidenced in writing.
The acts performed must point plainly and not merely in an equivocal fashion to the existence of an agreement
between the parties.
Circumstances must be such that were the contract in writing, equity would decree specific performance.
o Maddison v Alderson (1883) 8 App Cas 467
o McBride v Sandland (1918) 25 CLR 69
S36(d) Property Law Act 1969 (WA) preserves the operation of the law relating to part performance, demonstrating that part
performance is available for the recognition of an equitable interest in land.
o
The issue with part performance is typically what will constitute a sufficient act of part performance.
Regent v Millett (1976) 13 CLR 679
Facts:
o
o
o
o
o
o
o
Millet wanted to buy a house that needed finance and Regent, his in-laws, bought the house on condition that
Millet would pay the mortgage.
Millet took possession of the house and started making repayments but later fell into arears and Regent helped
to make the mortgage repayments.
Later the house needed repairs and it was suggested that if the house was transferred to Millet, they could
then obtain a further advance on the mortgage.
Upon this supposition, Millet obtained a loan of $2000 and carried out repairs.
Regent later refused to transfer the house to Millet, and since the agreement to transfer the house to Millet
was only oral, it was said to be void.
Issue: Issue raised was whether there were specific acts of part performance to support the agreement, which
included taking possession of the house, carrying out repairs and renovations and making mortgage
repayments
Regent said the acts relied upon were not unequivocal and were not done in the performance of any such
contract.
Outcome:
o
o
o
The court held in favour of Millet finding that the acts done here were unequivocally equable to an agreement
as alleged by Millet.
Court noted that acts of part performance need not be compelled by the contract, they merely need to be of
such a nature that they are done pursuant to the contract.
Entry into possession, combined with mortgage repayments was enough here.
48
Pipikos v Trayans (2018) 92 ALJR 880
Issue: Whether the payment of the deposit or other monies alleged to be the balance of the purchase price, and of mortgage
repayment and the making of the written note, were sufficient to constitute part performance of a contract of sale? On the other
hand, were they merely payments made towards an alleged loan agreement?
o
The court was invited to consider whether Steadmen v Steadmen should be followed as good law in Australia, ie.
Whether the requirements of the doctrine of part performance could be relaxed?
o Court held that the test should not be relaxed as the contract here was not in writing and there were no sufficient acts
of part performance.
o Court noted that acts of part performance must be unequivocally referable to some such contract (this is critical), so as
not to undermine the purpose of s4 of the Statute of Frauds
o Thus overall, if a contract exists, it should be performed.
o The court also noted some differences between part performance and an estoppel:
1. Majority, excluding Adelman J, noted that part performance can enforce an oral contract that equitable estoppel is only
enforceable against a vendor to vindicate the interests of a prospective purchaser.
2. The concern of part performance is an unperformed or partially performed agreement, whereas the concern of
equitable estoppel is detrimental reliance. Majority noted that part performance is a doctrine enabling the
enforcement of equities which can lead therefore to the enforcement of the agreement.
o In the context of general law land, one may think of part performance arising typically by the exchange of deeds in
relation to a mortgage transaction.
 Example: You loan someone $100000 and instead of a mortgage document/conveyance being prepared, you receive
the title deeds to the property – this may be seen as mortgage by way of part performance `
ANZ Banking Group Ltd v Widin (1990) 102 ALR 289
o
o
o
o
o
o
o
o
o
The modern relevance of part performance was raised in ANZ bank, where the banks authority to complete the blank
mortgage was held to be an insufficient note or memorandum.
However, a further issue was whether there were sufficient acts of part performance.
Hill J held that the acts of the bank here were unequivocally and by their own nature referrable to the mortgage alleged
by the bank.
Interestingly, Hill J also held that the principles of estoppel will also lend support to the bank, noting that it was
unconscionable for Widin to rely on the lack of a note or memorandum to deny the ANZ the benefit of the mortgage.
Overall, if you fail under s4 of the Statute of Frauds, because you don’t have a note or memorandum, you should also
consider whether relief would be available under the doctrine of part performance OR the principles of estoppel Mason
v Clarke [1955] AC 778
This case provided an example of where the payment of money to an owner was preferable to the existence of an oral
contract and therefore entitled sufficient act of part performance.
Payment of money alone, was not a sufficient act of part performance, but it was the payment of money coupled with
other acts that was sufficient Steadman v Steadman [1976] AC 536
Purportedly established that the mere payment of money can be enough to be a sufficient act of part performance,
although the payment of money was accompanied by the forwarding of the transfer of land occupant, contrary to the
situation established in McBride Sandland case, which took a much more restrictive approach in its treatment of what
would be a sufficient act of part performance.
Unlike Mason v Clarke, here, it is suggested that the mere payment of money can be a sufficient act of part
performance.
Mason v Clarke [1955] AC 778
o
o
o
o
This case provided an example of where the payment of money to an owner was referable to the existence of an oral
contract and therefore entitled sufficient act of part performance.
Payment of money alone, was not a sufficient act of part performance, but it was the payment of money coupled with
other acts that was sufficient Steadman v Steadman [1976] AC 536
Purportedly established that the mere payment of money can be enough to be a sufficient act of part performance,
although the payment of money was accompanied by the forwarding of the transfer of land occupant, contrary to the
situation established in McBride Sandland case, which took a much more restrictive approach in its treatment of what
would be a sufficient act of part performance.
Unlike Mason v Clarke, here, it is suggested that the mere payment of money can be a sufficient act of part
performance.
49
Doctrine of Equitable Estoppel
Estoppel is a means by which equity will step in to permit the creation or disposition of an interest in land. In essence, it involves
a representation created by one person, relied upon by another, causing detriment and in circumstances where it would be
unconscionable for the first party to deny the effect of their representation. (The law stopping a party from blowing hot and
cold).
Waltons Stores (Interstate) Ltd v Maher (1998) 164 CLR 387
Facts:
o
o
o
o
It was agreed that the landowner would demolish his building and build a new building to the tenants’ specific
requirements of Walton Stores and a lease of 6 years with a 6-year option would then be entered into
Negotiations concerning amendments were entered into, regarding the lease to be drawn up.
Later the solicitors for Walton Stores indicated that their client’s approval to amendment s had not yet been given,
indicating that they would advise Maher the next day if they had still not been agreed to, but no further
communications were then received.
Maher’s solicitors then forwarded finalised lease documents and commenced demolition of the building, however the
tenants’ solicitors were instructed that their client’s enthusiasm for the project had declined and they were to go slow,
further instructing their solicitors that they would not be proceeding with the lease, by which time the landlord had
already demolished his old building and built 40% of the new building
Issue: Whether any equity had been raised in favour of Maher
Outcome:
o
HC held that Walton Stores was estopped from withdrawing from the lease • Brennan J set out 6 criteria for establishing
estoppel. These are as follows:
Six Elements of Equitable Estoppel
1.
2.
3.
4.
The plaintiff assumed that a particular legal relationship existed between the plaintiff and the defendant or expected
that a particular legal relationship would exist between them, and, in the latter case, the defendant would not be free
to withdraw from the expected legal relationship.
The defendant had induced the plaintiff to adopt that assumption or expectation.
The plaintiff acted or abstained from acting in reliance on the assumption or expectation.
The defendant knew or intended him to do so (act or abstain from acting) 5. The plaintiff action or inaction will
occasion detriment if the assumption or expectation is not fulfilled 6. The defendant has failed to act to avoid that
detriment These requirements were subsequently applied by the HC in the case of Geomellie v Geomellie
Five Requirements for Specific Performance
Plaintiff must establish the existence of a contract, but it will not be awarded where it is unconscionable to do so, or involve the
continuing supervision of the court, or compel the performance of services, or the maintenance of a personal relationship.
Reason as to why one shall dive into specific performance is because it is a remedy for part performance.
1.
2.
3.
4.
5.
The contract must be binding, either because it is in writing, or because of a sufficient act of part performance.
The obligation to transfer property must be unconditional and not subject to the approval of a third party (must be
unconditional)
The vendor must be able to give good title, or the purchaser must be prepared to accept title defects.
The contract must not be unconscionable or inequitable.
The purchaser must not have breached any essential term For good insufficient acts of part performance  Look at
Geomellie v Geomellie and Madison v Alderson where working without wages on the promise of a life estate in land
with a will which was incorrectly witnessed was held to be involving equivocal acts
Practical Strategies
o
o
o
o
If s4 of the Statute of Frauds cannot be satisfied because there is not a sufficient note or memorandum, consider if the
agreement can be upheld by way of part performance or estoppel.
Part performance will not make a contract where non exists
Part performance will generally be preferred over equitable estoppel, provided that there are sufficient unequivocal
acts
Problem with equitable estoppel is that the primary remedy given is the minimum required to address the detrimental
reliance that remedy may not necessarily result in the plaintiff receiving an interest in the land – it might, for example,
be merely an award of damages.
50
o
Thus, if you fail for Statute of Frauds, then the purchaser will typically seek part performance and if not part
performance, equitable estoppel.
4. Statutory Requirements for Legal Interests
Statutory Requirements for Passing Legal Interest
Property Law Act 1969 (WA)
S33 – Conveyances to be by deed.
1)
2)
All conveyances of land or of any interest therein are void for the purpose of conveying or creating a legal estate unless
made by deed.
This section does not apply to — …
c. surrenders by operation of law, including surrenders that may, by law, be effected without writing;
d. leases or tenancies or other assurances not required by law to be made in writing; …
g. conveyances taking effect by operation of law.
What is a Deed?




The idea of a deed is that it involved a very formal and solemn process.
If people were to grant interest in land, which was a very serious thing to do, then the law would require a substantially
onerous task, which was the entering into of a deed.
In this day, the requirement of a deed simply requires a signature of each party who is a party to a deed to have their
signature witness by a witness who is not a party to the deed.
It is common to have stated in words above the signatures in a deed, the words, ‘executed as a deed’
S9 – What is a deed.
1)
2)
3)
4)
Every deed, whether or not affecting property —
a) shall be signed by the party to be bound thereby; and
b) shall be attested by at least one witness not being a party to the deed but no particular form of words is required
for the attestation.
It is not necessary to seal any deed except in the case of a deed executed by a corporation under its common or official
seal.
Formal delivery and indenting are not necessary in any case.
Every instrument expressed or purporting to be an indenture or a deed or an agreement under seal or otherwise
purporting to be a document executed under seal and which is executed as required by this section has the same effect
as a deed duly executed in accordance with the law in force immediately prior to the coming into operation of this Act
Torrens Land


A registered instrument is deemed to be a deed (Transfer of Land Act 1893, s85)
With the Torrens System, one needs registration of an interest to create a legal interest – however, exceptions to TLA
s68 can effectively result in some unregistered interest which are exceptions being effectively treated as legal interests.
5. Equitable Interests and Statutory Requirements
All states, including WA, have legislation imposing formal requirements for the creation of transfer of equitable interest in land
finance.
Statutory Requirements for Passing Equitable Interest in Land
s34(1)(a) Instruments required to be in writing – Property Law Act 1969 (‘hereafter ‘PLA’):

No interest in land is capable of being created or disposed of except by writing signed by the persons creating or
conveying the interest or by his agent thereunto agent lawfully organises it in writing, or by will, or by operation of law
S35 Creation of interest in land by Parol.
1) Any interest in land created by Parol and not put in writing and signed by the person so creating it, or by his agent
thereunto lawfully authorised in writing, has notwithstanding any consideration having been given for the
interest, the force and effect of an interest at will only.
2) Nothing in the foregoing provisions of this Part affects the creation by Parol of leases taking effect in possession
for a term not exceeding 3 years, whether or not the lessee is given power to extend the term.
S36 Savings in regard to sections 34 and 35
Nothing in sections 34 and 35 –
51
a)
b)
c)
d)
Invalidates dispositions by will;
Affects any interest validly created before the coming into operation of this Act;
Affects the right to acquire an interest in land by virtue of taking possession; or
Affects the operation of the law relating to the part performance.
s34 PLA and s4 Statute of Frauds
There is controversy which exists between s34(1)(a) of PLA and s4 of Statute of Frauds



S4 will allow an oral contract with a written note or memorandum signed by the vendor or his agent, which agent need
not be authorised in writing, to be sufficient to create an equitable interest.
Opposingly, s34(1)(a) requires a written contract and where the document is executed by an agent for that agent to
have been authorised in writing.
On its face, there seems to be conflict and inconsistency between the requirements that are more onerous of s34(1)(a),
requiring a written contract and the agent to be appointed in writing, and s4 which merely requires a written note or
memorandum with any execution by an agent not needing to have been appointed in writing.
Adamson v Hayes (1973) 130 CLR 276 (conflicting decision)
Facts:




Case concerned an oral agreement for the pooling of various mineral claims and to take effect immediately so as to
change existing beneficial interest holders, together with an executory agreement for the grant of options.
Adamson and Hayes both held certain mineral claims as trustees.
Oral agreement was subsequently breached for the establishment of a partnership, which included the granting of an
option to acquire an interest in mineral claims for $60000.
Option was exercise and the money was tendered, however the appellants refused to accept the exercise.
Issue: If the minerals were land, as defined under the property law act, was the oral void or unenforceable for failing to satisfy
section 34? Was it also unenforceable as it was the sale of an interest in land, and s4 of the Statute of Frauds was not satisfied?
Outcome:




Decision of the HC presented with a range of conflicting and ultimately unhelpful reasons.
Applying the definition of land under s7 of the PLA, this included a mineral claim, and the rights within a mineral claim
fell within this definition of land.
Problem was that the HC was split as to which part of s34 applied.
Gibbs, Walsh, Stephen and Menzies J presented the specific performance of the oral agreement.
o Gibbs J

S34(1)(a) PLA applies to a contract for the sale of an interest in land and captures both legal and
equitable interests in land. S34(1)(a) PLA is not confined to the creation or disposal of legal interests.
There is substantial overlap between s34(1)(a) PLA and s4 Statute of Frauds. S34(1)(c) PLA is not
confined to equitable interests in land.

Most difficult judgment

Agrees with Stephens J that s34(1)(a) was not confined to legal interests, but he did not think there
was a disposition of any equitable interests, however, applied s34(1) (a) as the option was effective to
create an equitable interest.

Also said that s34(1)(c) was not limitable to equitable interests.
o Walsh J

S34(1)(a) is confined to legal interests. It appears Walsh J considered s34(1)(a) applies to a contract.

Disagrees with Menzies J on s34, claiming that the agreements involved dealings with equitable
interests and was accordingly unenforceable under s34(1)(a), therefore he didn’t need to consider
s34(1)(b)/(c) o Stephen J

Takes the same view of s34(1)(a) as Walsh J

Implicitly disagreeing with Menzies J that s34(1)(a) was restricted to legal interests, thought the
agreement involved a declaration trust and therefore was void under s34(1)(b)
o Menzies J

Considered s34(1)(a) PLA not relevant as it only related to legal interests.

S34(1)(a) PLA applies only to the creation of disposition of legal interests, s34(1)(c) PLA is confined to
land.

“If s34(1)(a) applied to equitable interests, it would make s34(1)(b)/(c) redundant”.
52
Marist Bros Community Inc v Shire of Harvey (1994) 14 WAR 69
This case helps deal with the apparent inconsistency between s34(1)(a) PLA and s4 Statute of Frauds. This decision restores the
traditional view of the formalities required for executory contracts for the sale of land i.e. s34(1)(a) PLA does not apply to
executory contracts for the sale of an interest in land since it is directed to the creation of interests in land by conveyance or
other instruments such as express trusts and not to agreements as such
Facts:





Case involved a series of 5 letters which had been exchanged in correspondence between the parties
Did these amount to an enforceable agreement for the sale of land?
The lessors evidenced it was argued that an offer and acceptance containing all the necessary factual elements to
identify the agreement
o It was further argued that these were capable of sustaining an intention to enter into a binding legal
relationship
Raised the question of what evidentiary requirements needed to be met
The established WA view of the operation of s34 was relied upon by the Marist Brothers – denying the existence of an
enforceable contract, stating that there had been no appointment in writing of the agent acting on their behalf during
negotiations
Question: What was the necessary evidentiary standard that needed to be met if a binding contract existed between the
parties?
Outcome:







Court found that the purpose of s34(1)(a) was that conveyances of land ought to be effected by deed and interest in
land ought to be created in writing
Court held that s34 does not apply to ordinary contracts for a sale of a fee simple estate
This, the court said s34(1)(a) would deal with other interests outside of executory contracts o Executory contract –
contract entered into now, where performance is to be done at a future time, which is most contracts today (ie. We sign
a contract at a certain time, but we settle on the contract at a future date)
This decision restores the traditional view of the formalities required for executory contracts for the sale of land i.e.
s34(1)(a) PLA does not apply to executory contracts for the sale of an interest in land since it is directed to the creation
of interests in land by conveyance or other instruments such as express trusts and not to agreements as such Pidgeon J:
o “I do not consider it was being said that s34 extended to ordinary contracts of sale of the fee simple, which
would be transferred by a Transfer of Land Act transfer when the time for settlement arrived. The agreement
that has been made enforceable is by reason of the writing satisfying the Statute of Frauds. In these
circumstances it is open to obtain an order for specific performance by effecting the conveyance.”
Pidgeon J  Distinguishes Adamson v Hayes.
Seaman J  s34(1)(a) PLA applies to the creation of interests in land and not to agreements as such.
Roland J  Accepts Pidgeon J’s interpretation of s34(1)(a) but does not accept this construction is consistent with the
majority view in Adamson v Hayes.
Conflict between s4 Statute of Frauds and s34(!)A() PLA:






Essentially, s34(1)(a) was intended to relate to matters excluding executory contracts, which was determined by looking
at the legislative history of s34 and going right back to the original Statute of Frauds
Looking at the Statue if Frauds, there was a subsequent provision dealing with the precise subject matter from which
s34(1)(a) comes i.e.. S4 and the predecessor to s34(1)(a) were two separate provisions within the same act and it could
not have been intended that s4 Statute of Frauds was intended to conflict with the parent provisions of s34(1)(a), to be
found in the Statute of Frauds
The apparent provision relates to conveyances and other instrument; therefore, we only impose the higher requirement
of s34(1)(a) in relation to conveyances and other instruments, but do not impose the higher requirement oof s34(1)(a)
in relation to executory contracts
In the context of dealings by way of the chain of correspondence, the court said it was possible a contract could exist for
the sale of land, despite it being impossible to analyse the transaction in terms of an offer and acceptance – rather the
contract would be inferred from the conduct and action of the parties as well as or in the absence of words or mutual
assent between the parties, may be established in the entirety of negotiations
Here, purchase price was agreed, and the resolutions further details were a matter of administration only.
Since the essential terms were agreed with unconditional acceptance, the only conclusion could be that the legal
relations were intent and that there was a binding contract.
53


As regards to the agent, the correspondence from the shire clearly indicated that the agent’s authority extended to
negotiating the terms of the sale of the land
The shire was aware of the correspondence between the Maris Brothers and the agent, and thus had the authority to
write the letters constituting the concluded contract (according to Pidgeon J)
Prior subsequent cases leading to Marist Bros case:
These cases show the court shifting between thinking that on one hand s34(1)(a) applies to equitable interests in an executory
contract, vs, s4 Statute of Frauds







Parker v Manessis [1974] WAR 54
o Held a contract for the sale of land must satisfy s34(1)(a) PLA (relying upon the majority in Adamson)
Monte v Buongiorno [1978] WAR 49
o Held the creation of equitable rights in unaffected by s34(1)(A) PLA, and that Parker was wrong. Wallace J
concludes that s34(1)(a) PLA applies only to final documentation and not an agreement to sell.
Redden v Wilks and the Registrar of Titles [1979] WAR 161
o Held s34(1)(a) PLA applies to an oral interest in land, but the doctrine of part performance remains intact
(applying HC majority in Adamson)
Trifid Pty Ltd v Ratto (1985) WAR 19 (on appeal (1985) 56 LGRA 22)
o Held that s34 PLA affects equitable interests and legal interests (Brinsden)
Abjornson v Urban Newspapers Pty Ltd [1989] WAR 191
o Held that s34(1)(a) applies to the creation of interests of land, not agreements.
Blazey v Polletti (1990) ANZ Conv R 168
o Held that s34(1)(a) applies to equitable interests, and is stronger than s4 Statute of Frauds
Secretary, Department of Social Security v James (1990) 95 ALR 615
o Held s34(1)(a) and (b) do not require a declaration of a trust in land be only capable of being created in writing
and further, to be manifested and proved by writing signed by the declarant.
Acquisition of Equitable Interest by way of Constructive Trusts


An equitable interest in land can arise by way of a constructive trust, arising where it would be unconscionable for one
party to use legal ownership or title to assert supremacy over another.
Sorts of things that might indicate constructive trusts are:
o
Inequality of bargain power
o
Vulnerability of one party to the other; and
o
An unfair advantage being taken off of one’s position.
Baumgartner v Baumgartner (1987) 164 CLR 137
Facts:





Parties met through work.
Female leaves her husband and children and reside with the male.
Female leaves the male on many occasions but often returns and in deed, marriage is discussed.
The male, later down the track, purchases land in his own name and both parties pool their earnings, with mortgage
and living expenses coming out this. Lastly, a child is born between these two.
Finally, the relationship ends.
Outcome:




HC says it will be unconscionable for the male partner to rely on his legal title to deny any beneficial interest in the land
to the female.
Given they had pulled their resources, such donation were not intended to be a gift by the female to the male.
Constructive trust was imposed by the HC to reflect their respective contribution, therefore 55% male and 45% female
respectively.
Through that constructive trust, the female partner is then afforded an equitable interest.
Ogilvie v Ryan [1976] 2 NSWLR 504
Facts:



Owner (Ogilvie) promised the defendant (Ryan) a life tenancy of his house if she lived with him and looked after him
until his death.
The owner died without mentioning the defendant in his will.
The plaintiff (executor of the owner’s estate) sought possession of the house from the defendant.
54
Arguments:



Defendant argued that there was a constructive trust because of evidence of a common intention that the property
would be bought to give to that common intention.
In addition, she had altered her position based on that common intention and acted in a way beneficial to the deceased
upon the faith of his assurance that the common intention would be carried out.
It would be fraud for him now to assert his legal right to the property in order to defeat the promised beneficiary.
Issue: Constructive trusts – common intention constructive trusts  whether the law would give effect to the owner’s promise
Judgement:





After examining a number of cases, it seems that a constructive trust will be established in either of the following cases:
1. Where the constructive trustee has only obtained his legal title because of the beneficiary and obtained it only by
having agreed that the beneficiary would have a beneficial interest in the property.
2. Where the constructive trustee acquired title regardless of the beneficiary, but then the value of the property was
increased by the work of the beneficiary.
Neither of those scenarios fit the present case, because the benefits which the defendant provided were of a domestic
nature rather than improvements to the property.
However, the common intention of the parties clearly show that the defendant was to receive beneficial interest.
Equity is able to intervene when there is an unconscionable use of legal title to deny someone’s beneficial ownership,
and therefore a constructive trust arises here.
Defendant was found to be in favour here.
The Law on Priorities Between Competing Proprietary Interests (Topic 4.5)
1. What is a Priorities Dispute
When 2 or more people claim inconsistent rights over the same object, there is a priority dispute:

Situations resulting in this problem can arise, e.g., through fraud by a seller, or mistake of a seller as to his status eg. he
is not the true owner.
A priorities dispute is between two parties who do not have a direct in personam relationship with each other, but whose claim
in attached to the property itself.




E.g., A fee simple holder enters into a contract of sale  later the fee simple holder enters into a second contract of
sale regarding the same land with a different party  the fee simple holder therefore has an obligation to transfer the
land to each of the purchasers (impossible)
To work out who gets the land, we look to the priority rules.
E.g., A tenant in equity who has possession of land, and the landlord who is the legal holder of a fee simple estate 
interest is sold to a new legal fee simple holder  there is no in personam relationship here between the new owner of
the land (landlord) and the tenant, but the priority rules will determine whether the tenant is able to stay on the land.
Here, each of the parties have a claim to possession:
1. The new owner by virtue of holding a fee simple estate; and
2. The tenant by virtue of the equitable lease
Priority disputes usually do not arise between the creator and the recipient of the interest  that dispute is resolved by whether
the interest has been created.
Someone who holds a legal fee interest estate but bought the land with a 50% contribution from a partner, does not involve a
priority dispute  instead the matter is determined by working out the existence of the equitable fee simple by the joint
contribution which might be implied or constructive, depending upon the facts.
Another example of where there might not be a priority dispute is someone who holds a fee simple estate at law, and later
creates an equitable mortgage over the land which the legal fee simple owner then fails to pay.

The dispute here is not a priority but is instead resolved by determining the existence of the mortgage and the rights
attaching to that mortgage.
55
PRIORITIES – ANSWER GUIDE
1. Identify the parties to the priorities dispute.
“Resolving the competing interests “
A priorities dispute arises as X, Z, T and Y are all seeking to enforce their respective interests against A”
2. Work out whether their interests are legal or equitable.
a. “As X is the RP, he will enjoy indefeasible title under s184(1) LTA.
b. “As Z has an unregistered mortgage/lease/transfer, then they hold equitable interest.
c. “As Y has an unregistered mortgage/lease/transfer, then they hold equitable interest.
d. “T’s right to set the transfer to A set aside on the basis of fraud under s184(3)(b) LTA may be a mere
equity as per Latec Investments, or may be a full equitable interest as per Breskvar v Wall.
e. An equitable mortgage can be created by depositing the certificate of title with the mortgagee (s 75 PLA)
3. “As between party X and party Y, there is a competition between (use appropriate rules below)
a. earlier legal vs later legal
i. Under general law, the principle nemo dat quod non habet applies and the subsequent transfer
will not be effective as the original title holder will have divested themselves of title.
ii. “In regards to Torrens system land which is a system of title by registration (per Barwick CJ in
Breskvar v Wall), a priority dispute is resolved by reference to ss184 & 185 of the LTA. The
general rule is that the current RP (later legal title holder), will obtain indefeasible title subject to
any earlier registered interests, but free from any unregistered interests, provided none of the
exceptions to indefeasibility apply.”
iii. Mortgagees are paid out according to priority of time (s 88 PLA)
1. When mortgagee exercises a power of sale, the mortgagee’s interest is extinguished after
the exercise of sale (s 79)
b. earlier legal vs later equitable
i. Under common law, in a competition between the earlier legal interest and a subsequent
equitable interest, the earlier legal interest will generally prevail where the merits of the case are
equal.
ii. However, the prior legal estate will be postponed if the holder of the prior estate is guilty of
fraud (Whipp), negligence contributing to the creation of the subsequent equitable interest
(Walker v Linom), or an estoppel may be established against him (Barry v Heider)
iii. “under s 184(1) LTA, a registered proprietor holds their interest free from any unregistered, that
is, equitable, interests. This is the case save for when there is any fraud by that RP, or any of the
other exceptions to indefeasibility apply, found in s 185 LTA. So in the absence of fraud or other
exception, the earlier legal interest prevails. Where the RP has contributed by negligence etc, an
in personam exception may apply”
c. If earlier equitable vs later legal
i. Under the general law, the resolution of the dispute will depend on whether the holder of the
newer legal right is a BFPVCWN, (Bona Fide Purchaser With Constructive Written Notice) in order
to take free of the earlier equitable right: Pilcher v Rawlins
d. Refer to Equity v Equity.
56
2. Three Steps in Resolving a Priorities Dispute
1.
2.
3.
Determine whether each interest is legal or equitable.
o In this step, one cannot understand and apply the law of priorities until it is understood the requirements for a
legal interest and an equitable interest in land.
Determine the date that each interest was created.
o E.g. if one is considering the date of the creation of a legal interest, when was the deed entered into between the
parties?
Apply the appropriate priority rule.
3. What is the Outcome of a Priorities Dispute



Generally, the superior claim will be that of the first created interest, but the interaction between legal and equitable
principles can create a different result.
A decision as to priority may result in an inconsistent interest being either defeated, or merely made subject to another
interest.
The party that loses a priorities dispute may still have a remedy available, but generally not against the party that has
defeated them in the priorities dispute, and generally not in property law itself.
o
o
Eg. A purchaser of an estate under fee simple over a contract of sale, which grants an equitable interest (Marist
Bros) whose interest is postponed to another purchaser, would have a claim against the seller for breach of
contract – perhaps also or alternatively breach of fiduciary duty
Eg. A new purchaser who has been promised vacant possession but loses a priorities dispute to a tenant as
regards to that possession  the new purchaser may be entitled to rescind the contract of sale before
completion, or to bring a damages claim, depending upon when the dispute arises
1. Earlier Legal Interests (L1) vs. Later Legal Interests (L2)
Naemodat Quadenon Habbett rule: You cannot pass that which you do not have yourself.





Priorities between legal interests in general law land, are relatively rare  often the outcome is that one or the other
does not truly have a legal interest, or does not have the legal interest he/she thinks is held.
o E.g. two people claiming to be the legal fee simple holder over the same piece of land – one must be incorrect
or there is no priority.
A dispute between two competing legal interest, is determined according to the priority of time by which they are
created.
Priority is accorded to the legal interest first created, with time starting on the date of execution of the document
creating that legal interest.
In general law land, this will be a deed, as per s33 PLA, unless the legal interest falls under one of the acceptations
under s33(2) PLA.
In general, subject to considerations arising out of the conduct of the parties, as between two interests of the same
quality, the first in time will prevail (Moffett v Dylan [1999] 2 VR 480)
o Where one legal estate is of a smaller duration, or more circumscribed than the other, the outcome may be
different.
o E.g., A leases to B, then A sells to C  C may then take subject to B’s lease __> here, both are legal interests,
and B’s prior interests still hold.
Deeds Registration System



The aim of the Deeds Registration System was designed to reduce the risk that a purchaser might acquire an interest in
land without knowledge of an earlier inconsistent interest
Therefore, the ability to register most instruments affecting general law land, under the Deeds Registration System, is
not dependent upon the date of execution, or creation of the interest, or upon the nature of the interest, but upon the
date of registration
In WA, we have the Registration of Deeds Act 1856, providing a vehicle for the registration of interest in general law
land – does not apply to Torrens title land)
o In WA, it seems possible that a contract of sale giving rise to an equitable interest in land, may be capable of
registration, thus capable of effecting a priorities dispute
o In WA, priority is decided according to the date of registration
o Under s3 of Registration of Deeds Act…
“That all such judgments, deeds, conveyances or instruments in writing, registered in pursuance of this Act,
57
shall have priority one over the other according to the priority of their respective dates of registration; and that
all such judgments, deeds, conveyances, devises or instruments in writing not registered in pursuance of this or
some former Act, shall (as against any subsequent bona fide purchaser or mortgagee of the same lands,
tenements or hereditaments for valuable consideration) be absolutely null and void to all intents and purposes:
Provided that nothing herein contained shall extend to bona fide leases at rack rent for any term not exceeding
14 years.”
… any unregistered instrument is invalid against any subsequent bonefidae purchaser for value of the same
interest in land , appearing to be the case whether or not the subsequent purchaser has registered his/her
instrument.

Under s19 of the Registration of Deeds Act, it is provided that the court may cancel false or fraudulent registrations
“That it shall be lawful for the Supreme Court to receive a petition from any person praying relief against any
registration affecting any interest of such petitioner in any lands or hereditaments, and alleged by him to be false or
fraudulent; and if the said court shall by any means be fully satisfied of the truth of such allegation, it shall be lawful for
the said court to order summarily that such registration be cancelled; and the said Registrar, on being personally served
with such order, shall make such cancellation accordingly, and shall safely keep such order, making due reference
thereto in his books of registry and indexes.”

In giving practical context, there is very little general law land left in WA, and therefore little land left held under the
Registration of Deeds Act 1856 (some still in York and Albany)

Registration of Deeds Act was ultimately found to be ineffective in resolving many of the problems of the general law
priority rules and it was in part the failure of this system that led to the introduction of the Torrens system

Some interests under the Registration of Deeds Act would be unregistrable.
o
An oral contract supported by part performance  here, the interest would not be defeated by registration
(Whyte v Nealylon (1886) 11 AC 171)
2. Earlier Legal Interest (L1) vs. Later Equitable Interest (E2)


Due to the hierarchy of interests, the L1 will prevail, unless there are some extenuating circumstances.
The rule is that L1 will only be postponed to E2 where:
o
The holder of the legal interest, by fraud or gross negligence, contributes to the creation of the later equitable
interest; or
o
The legal mortgagee gives up or fails to retain possession of title deeds.
Northern Counties of England Fire Insurance Co v Whipp (1884) 26 Ch D 482
This case demonstrates where L1 remains superior to subsequent equitable interests, E2
Facts:




Northern Counties (NC) had provided a loan to its manager, Mr Crabtree who provided NC with title deeds to his land as
security to his mortgage.
NC placed the title deeds in the office safe, however, Mr Crabtree then removed the title deeds from the safe and
purported to create another mortgage in favour of Whipp, who had no knowledge of the prior mortgage to NC
Subsequently, NC liquidator sued Whipp and Crabtree’s trustee to try and establish the priority of NC mortgage when
NC went into liquidation.
Whipp argued that the mortgage to NC was fraudulent and therefore should have priority, or that NC carelessness
should postpone their mortgage.
Issue: Should NC L1 mortgage be postponed by E2 mortgage?
Outcome:



Court held that L1 will only be postponed to E2 where: a) The holder of the legal estate has, by fraud or gross
negligence, contributed to the creation of E2; or b) The legal mortgagee gives up, or fails to retain possession of the title
deeds.
The legal mortgagees title can never be improved by subsequent dealings with the title deeds, therefore fraud won’t be
established unless the legal mortgagee cooperated with the mortgagor to defraud the subsequent mortgagee
Fry LJ rejected the arguments of Mrs Whipp: “the decisions on negligence at common law have been pressed on us in
the present case. But it appears to us enough to observe that the action at law for negligence imports the existence of a
duty on the part of the defendant to the plaintiff, and a loss suffered as a direct consequence of the breach of such duty.
58







And that in the present case it is impossible to find any duty undertaken by the plaintiff company, NC, to Mrs Whipp.
The case was argued as if the legal owner of the land owed a duty to all others of her majesty’s subjects to keep the title
deeds secure, as if the deeds were in the eyes of the law analogous to fierce dogs, or destructive elements, where from
the nature of the thing, the courts have implied a general duty of safe custody on the part of the person having their
possession or control.”
The duty by the owner to keep the title deeds secure requires negligence in two parts: a) Negligence carelessness b)
Negligence as a question of duty of care.
Fry LJ stated that priority will not be lost where the legal mortgagee makes inquiries for the deeds and is given a
reasonable excuse for their non-delivery, or, has only received some of the deeds when assured he has received all of
the deeds and in this instance, he will not normally loose priority
Where priority will be lost is “where the legal mortgagee leaves title documents with the mortgagor, eg Crabtree, with
authority to raise money, and the estate created by the mortgagor has been represented through the mortgagors
conduct as being a legal estate, then the original mortgagee will be postponed. Where the legal mortgagee has made no
enquiry for the title deeds, and subsequently they have been misused, he will also be postponed.”
Overall, the court found that there was no fraud. The plaintiff had never been party to the scheme of Crabtree to
defraud Whipp. The carelessness here by the plaintiff, i.e. that Crabtree could access the safe, was only likely to injure
NC, not Whipp, and so was not enough to postpone the plaintiff
The key given to Crabtree wasn’t for him to deal with the authorities of the company – he was not acting as the
plaintiffs’ agent, so here L1 prevailed over E2.
Negligence as carelessness and negligence as a duty of care
Priority might also be held lost if the legal interest holder has an agent who exceeds wis authority  Legal holder will do
this.
Walker v Linom [1907] 2 2 CH D 104
This case demonstrates the second exception where L1 may be postponed to E2 ie. holder of L1 has been grossly negligent in
failing to acquire after, obtain, or retain possession of the title deeds to the property)
Facts:






W was the holder of L1 which he conveyed to trustees by a marriage settlement
Under the trust, W got a life estate or until he attempted to alienate, and then to his wife.
The solicitors who acted for W and trustees took possession of the title deeds, however, without their or the trustees.
knowledge, W retained the original deed in the chain which had conveyed the land to him
W later then held himself out as a fee simple owner and got a loan from, said person (X), on security of the deed
W purported to give X a legal mortgage
Later, X onsold to Linom
Issue: Which interest had priority? L1 of the trustee, or E2 of Linom? Did Linom have any interest at all since W had no estate to
give him? This is because W’s interest terminated on alienation and when naimo dat, the buyer would get nothing.
Outcome:






Trustees were held to be guilty in gross negligence in not obtaining all relevant title deeds.
Accordingly, the legal interest was postponed to the subsequently created equitable interest.
Court also held that if the legal interest holder allows title documents out of his possess, he is then responsible for any
of the consequences.
It has been suggested that Linom was treated as having E2, due to the intervention of the court.
Textbook indicates that the court implicitly accepts that that the legal interest holder is estopped by conduct, from
denying the existence of an equitable estate in the other party.
The judgement in this case was controversial because Linom appears to have relied on inadequate evidence of title.
Relationship of Agency

If the legal owner who has an agent who exceeds this authority, the legal owner will remain bound, since he has
estopped from denying by his conduct that he enable hid agent to purpurate the fraud
59
Perry-Herrick v Attwood (1557) 19 CLR
Facts:



‘A’ voluntarily gave his sisters a mortgage to secure antecedent debt and the sisters allowed him to retain the title
deeds, that he might be able to give a first mortgage to secure another debt, for which he was being sued by ‘B’.
A deposited the deeds with B to secure the debt, and afterwards, without B’s concurrence got possession of them and
mortgaged the estate to the plaintiff for a considerable larger sum, and delivered the title deeds to them.
The plaintiff had no notice of the mortgage to the sisters.
Outcome:





Court held that the mortgage to the sisters must be postponed to that of the plaintiff for the sisters, having with a view
to A’s raising a certain sum in priority to their mortgage, put it into the power of A to represent himself as an
unencumbered owner, and they could not, therefore, as against the plaintiffs who had advanced money on the faith of
A’s possession of the deeds, complain that A had raised more than what was agreed upon
Mortgage to the sisters was void as against the plaintiffs.
In this case, the deeds were not in a safe – the sisters were like a party to the fraud..
Overall, the court will postpone L1 to a subsequent E2, where:
1. The legal mortgagee has assisted in or connived in the fraud, which lead to the creation of the subsequent
equitable estate.
2. Where assistance or connivance is through the omission to use ordinary care after or keeping the title deeds
3. Where the legal mortgagee has made the legal mortgagor his/her agent
The court will not postpone L1 mortgagee to a subsequent E2 mortgagee however, due to mere carelessness or want of
prudence on that part of L1.
Barry v Heider (1914) 19 CLR 197
Gives us an example of where a legal interest holder permits another to hold out a legal estate and destine the other party
Facts:




The owner of land had executed a transfer of the land to S, which was not registered, and which was voidable by him,
on the ground of fraud on the part of the transferee.
S to whom the transfer had been delivered applied to H, who had no notice of the fraud, for a loan on security of land
S produced H the transfer, who purported to be duly executed and attested together with an order from the transferor
to the register general to deliver to H’s solicitors, the certificate of title which was lying in the register general’s office
On faith of these documents, and on an instrument of mortgage, signed by S, H made the loan.
Outcome:






The court held that H was entitled as against the proprietor to a charge on the land in terms of the mortgage.
Subsequently, the caveat was lodged by a solicitor on behalf of the proprietor stating that the purchase money had not
been paid o Caveat simply prevents a further dealing of the land.
During the course of the negotiations for a second mortgage by the transferee to B, the solicitor withdrew the caveat,
although in fact, the purchase money had not been paid.
B, who knew of the caveat and of its withdrawal, and also that the solicitor acted for the transferee, as well as the
proprietor, lent money on a second mortgage of the land
Court held that B’s mortgage should be postponed to the proprietor’s lean for the unpaid purchase money.
B was not entitled to rely on the withdrawal of the caveat in entering the second mortgage as he did not positively
establish the solicitor had authority to withdraw the caveat ‘
The take-away:



A L1 pay be postponed to a subsequent E2, if he gives a middleman documents, other than the title, depending on his
conduct.
Here, the transfer to S was obtained by fraud, but B’s legal interest was still subject to H’s legal interest.
The court felt that the transfer, couple with the signed authorisation from the register general to issue a new certificate
of title, operated as a representation that S had an interest that he could assign.
*Don’t get confused by certificates of title and registration  this was Torrens title land
60
L1 vs E2 overall

The overall relationship to where L1 may be postponed to E2 appear to be based on two principles:
1. Estoppel  L1 is postponed if it can be shown he is estopped from denying certain facts represented and relied
upon by another, typically the equitable interest holder.
2. Through a default, particularly negligence  L1 postponed due to fraud or negligence which induce an innocent
party, normally E2, to act to his detriment.

In Barry v Heider there is a mixture of both, but particularly estoppel.
3. Earlier Equitable Interest (E1) vs. Later Legal Interest (L2)
General Rule
In a dispute between E1 and L2, the general rule is that the bona fide purchaser of the legal estate (L2) for value without notice
of the prior equitable estate (E1) will prevail over that prior equitable estate.

For example, if A mortgages to B and then later sells to C, and C has no notice of B’s interest, C is not bound by the
mortgage o Remembering that with general law land, a mortgage involves an actual transfer of the estate – this is
distinct from a charge of Torrens title land.
o This priority rule is not that relevant today, given that most land in WA is Torren system land, and the Transfer
of Land Act makes specific statutory regulation in this scenario o However, focusing on general law land, this
rule remains particularly relevant.
o In working out the onus of proof in establishing bona fides for value without notice, the most accepted view
appears to be that the legal estate holder (L2) must prove value of the purchase without notice (Mills v
Renwick)
Elements L2 must Prove
There are three elements that L2 must prove to prevail over E1.
1.
The purchase must be bona fide and for value.
o It is for money or monies worth.
o L2 must have acted in good faith, honestly without fraud, collusion or participation in wrongdoing.
o There must be an absence of unconscionability (Midland Bank Trust Co v Green)
o The bona fide requirement in practice has been subsumed under the second requirement
2.
L2 must take his/her interest (the legal estate) without notice o There must be no notice of the prior equitable interest,
otherwise the legal estate will remain subject to E1 prior equitable interest.
o Three ways in which notice may occur:
1) Actual notice  was the interest holder advised on the equitable interest prior to taking their interest.
o The establishment that L2 has knowledge of the relevant facts, even if obtained from a third party.
o L2 may, however, have notice without even knowing it (Eagle Trust v SBC Securities)
2) Imputed notice  notice being received through an agent where the agent’s knowledge is imputed to the
principle, L2.
o S68 Trustees Act – knowledge L2 from one trust will not be notice in an unrelated trust matter
3) Constructive notice  There being some reason that L2 should have known about the existence of the
earlier equitable interest (E1)
o There is notice of matters which the purchaser, L2, would have become aware of, had L2 made all the
usual enquiries and inspections.
o Pilcher v Rawlins
3.
Requirements set out in Pilcher v Rawlins (1872) 7 Ch App 259
o
Express trustee breached his trust by transferring trust property to a friend who then mortgaged it for 10000
pounds.
o
When the fraud was discovered, the beneficiaries of the trust discovered a priority over the innocent
mortgagees.
61
o
o
o
James LJ accepted that the mortgagees were bona fide purchases without notice of the trust, thus their
mortgage had priority over their trust since equity had no reason to interfere with the legal estate.
Equity is defeated by a bona fide purchaser of value without notice of the prior interest.
James J ‘…A purchasers’ plea of purchase for valuable consideration without notice is an absolute unqualified,
unanswerable defence. Such a purchaser when he has wants to put in that plea, may be interrogated and
tested to any extent as to the valuable consideration which he has given in order to show the bona fides or
mala fides of his purchase, and also the presence of the absence of notice. But once he has gone through that
ordeal, and satisfied the terms of the plea of purchase for valuable consideration without notice, then this
court has no jurisdiction whatsoever to do anything more than let him depart in possession of that legal estate’
o
Here, the naimo dat principle was of no assistance to the beneficiaries of the trust because the trustee
had the legal power to transfer the land to his friend.
Issues with Constructive Notice
The issue of constructive notice will be judged by what enquiries a reasonable purchaser would make in such a transaction, and
what further enquiries would he make if he were alerted to something – boils down to the purchaser having two duties:

Duty to search and examine all documents attaining to the transaction (s22 Sale of Land Act 1970
o Only requires L2 to go back 30yrs in the chain of title, not to the original crown grant.
o If L2 doesn’t check the title documents and someone has an equitable interest which L2 should have discovered, L2 is
deemed to have constructive notice of E1.
o Consequently, the making of reasonable enquiries will prevent constructive notice arising.
o If the vendor removes documents in the chain of title, and the purchaser does not pick it up, even after making
reasonable enquiries, and the chain of titles seem complete, or the vendor gives a reasonable explanation, the
purchaser will not be deemed to have constructive notice.
o Also applies to documents within 30 years, mentioned in s22 Sale of Land Act 2. Duty to inspect the land.
o The possession of land by the person other than the vendor, should serve as a notice of a possessors’ interest in the
land, so that a purchaser, L2, is set to have constructive notice of e.g. an earlier tenant in possession, including a tenant
who has an equitable lease.
o If, for example, the purchaser is not in possession, the tenant is not under a duty to investigate, for instance, if he
discovers rent being paid to someone else (Hunt v Luck)


These obligations may be exhausted if reasonable enquiries don’t bring the interest to light.
Chain of title = chain of deeds that would have been drawn up in the transfer of the estate to previous interest holders at
law
Jared v Clements (duty to inspect the land) Actual rather than constructive notice, however it does demonstrate what can
happen when a fire uncovers information that would not have been discovered by usual searches and enquiries
Facts:





Plaintiff has an equitable mortgage over Taylors leasehold estate.
After becoming bankrupt Taylor sold to the defendants
Taylors solicitor failed to disclose the plaintiff’s mortgage when he prepared a list of title documents for the defendants
solicitors, however, the solicitors discovered it on Taylors bankruptcy file
Taylors solicitor then promised to pay off the mortgage and the sale was completed, however instead of paying off the
mortgage, the solicitor forged a discharge of the mortgage and absconded with the money instead.
Equitable mortgagee then seeks to establish his priority.
Outcome:



Court held that the defendant had purchased with notice of the encumbrance and was bound by it.
The fact that he had possession of the title deeds, and the legal estate afforded him not protection and the plaintiffs
equitable mortgage could still be enforced against him o Example of where L2 has not prevailed over E1
Byrne J at page 403 of Jared v Clements
o ‘If the defendants’ solicitors had not searched the bankruptcy files, the mortgage would probably have never
been disclosed and the purchaser could then have then claimed to be a purchaser for value without notice.
62

Since this was not a typical search, the defendant did not have constructive notice, but he could not remain a
bona fide purchaser once he had actual notice.’
The acquisition of information can also expand a purchasers’ constructive notice.
Smith v Jones [1954] 1 WLR 1089
Facts:


Jones bought a farm at an auction with prior knowledge that Smith had a lease of the farm, with Jones having inspected
the lease agreement before the sale.
Later, Smith claimed that the lease documentation did not properly reflect the terms of the lease with the previous
owner. And Smith claimed an equitable right to rectify the least, to which he claimed Jones was bound by.
Outcome:




Utbong J held that Smiths claim must be rejected and said in any event, ‘it was barred by a plea by a bona fide
purchaser for value without notice’.
A buyer of land had constructive notice of the rights of a tenant in possession, therefore, Jones had constructive notice
of any rights that he would have discovered through a proper enquiry into Smiths rights as a tenant.
However, here, when Jones bought the farm, Smith was unaware of the mistake in the written tenancy agreement, so
even if he had been asked, he would have answered that he thought the lease correctly represented his rights.
Jones had not discovered Smiths’ right of rectification of the lease, even if he had made proper enquiries, he did not
have constructive notice of it and his failure to make those enquiries did not affect his status as a bona fide purchaser.
Occupier in Possession with the Vendor
CLA v Plazer – Indicates that if the spouse is physically present on the land and has an equitable interest, a third party acquiring a
legal mortgage will take this mortgage subject to the spouses’ equitable interest, since there will be constructive notice of the
spouse’s interest.
Rule: Purchaser (or mortgagee) will have to take stringent precautions in order to avoid their interest, L2, being subjected to
occupiers who may have a prior equitable interest as E1, even where the vendor attempts to conceal the presence of the
occupier. There are, however, exceptions to this rule:


Wilkes v Spooner [1911] 2 KB 473  Bona fide purchaser for a value without notice can pass the legal estate to a
purchaser with notice, but who is not fraudulent.
Rule in Wilkes v Spooner: If there has been intervening interest that would have defeated the equitable claim, then the
claim is not revived by notice. If the subsequent legal interest holder was free of notice of the equitable interest, and
then passes to a second subsequent legal interest holder who does have notice, the second legal interest holder can rely
on the first legal interests’ holders lack of notice.
4. Earlier Equitable Interest (E1) vs. Later Equitable Interest (E2)
Most priority disputes fall into the category of E1 vs E2
General Rule: Equity will search for the better equity and will only use priority in tie where the equities are equal. Leading case is
Rice v Rice (1853) 161 ER 646
Rice v Rice
Facts:






The plaintiff, as holder of a legal estate, transfers land to B handing over the title deeds, but without receipt of the full
purchase price
This means that from this point, the plaintiff therefore had an equitable lien over the land.
Plaintiff is no longer the holder of a legal estate.
B receives the title deeds but was also given a receipt which indicated that the full purchase price had been paid, which
it had not
B then gave a mortgage by deposit of the title deeds to the defendants and then absconded with the money obtained
without paying either the plaintiff or the defendant for moneys owed
As a result, a dispute arose between the plaintiff who had an equitable lien over the land for payment of the purchase
price, and the defendant who was the later equitable mortgagee.
63
Outcome:

Court held that by handing over the title deeds to B and giving B a receipt that the purchase price had been paid in full,
the plaintiff had armed B with the power to deal with the estate as the owner.

Kindersly VC states that the general rule of equity as to priorities is that as between persons having only equitable
interests, if their equities are in all other respects equal, priority of time gives the better equity.

In order to determine if the equities are equal, the court will generally consider 3 factors:
1. The nature and condition of the respective equitable interests
2. The circumstances and manner of acquisition of respect of interest
3. The conduct of the parties and particularly whether there has been negligence or conduct that could amount to an
estoppel against one of the parties.





Kindersly VC further states that they voluntarily armed the purchaser with the means of dealing with the estate as the
absolute legal and equitable owner, free from any shadow of encumbrance or adverse equity.
Consequently, the defendant’s equitable mortgage, E2, was the between equity and prevailed over E1
o Note, that a later equitable interest for value will be better than an earlier equitable interest without value
Court is in particular looking for negligence or estoppel in the conduct of the parties (Barry v Heider case)
What one would be looking for to postpone E1 to E2, would be ‘conduct which has armed a third party to go into the
world under faults colours’
As a general rule E1 will be postponed to E2 where the conduct of the E1 has allowed the E2 to acquire that interest in
the mistaken belief that the earlier equitable interest did not exist
Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326



High Court has adopted a test of elements of both estoppel and negligence.
Mason and Dean J consider priority between competing equitable interest to be determined by a more general and
flexible principle
‘The better equity in an examination of the relevant circumstances, the overriding question is whose the better equity is
bearing in mind the conduct of both parties. The question of any negligence on the part of the prior claimant, the
effects of any representation by the prior claimant as possibly raising an estoppel in favour of the later holder, E2, and
whether it can be said that the conduct of the prior owner has enabled such a representation to be made.’
o Prior claimant = E1
Postponement will only occur where the earlier holders act or negligence contributed in some way to the later holder
acquiring its interest without notice of the earlier interest (Lapin v Abigail (1930) 44 CLR 166, 204) or whether it was
reasonably foreseeable that as a consequence of the acts or omissions of the earlier holders conduct, E1, a later
equitable interest, E2, might be created, and that the owner of the later E2 would assume the non-exitance of the
earlier E1 (Heid)
Overall




Purchaser of a legal interest without notice of a prior equitable interest, is in a better position than a purchaser of an
equitable interest without notice, as the former can rely on the bona fide principle to defeat the equitable interest.
If a E2 acquires with knowledge of E1, then E2 cannot claim to be misled where the earlier interest holder conduct
would otherwise have been postponing (Moffett v Dylan [1999] 2 VR 480)
Moffett v Dylan  notice of E1 by E2 will in general secure priority of the earlier interest
Rice v Rice see an exception to the rule  Tabula in naufragio.
o Phrase used metaphorically to designate the power subsisting in a third mortgagee, who took without notice of
the second mortgage, to enquire the second encumbrance, attach it to his own and thus, squeeze out and get
satisfaction before the second is admitted to the fund.
o This doctrine only really survives in the unjust and much criticized rule of tacking.

Tacking: Holder of an equitable interest, who acquires it without being aware of an earlier equitable
interest may be able to gain priority over E1 by getting in the legal estate by becoming a bona fide
purchaser
o Before this doctrine can be applied, it must be clear that the holder of the E2:
1. Had no notice of E1.
64
2.
o
o
o
The doctrine does not apply if the holder of E2 obtained the legal interest by virtue of a breach of trust,
on the part of the person conveying it to him o Tabula in naufragio situation can arise where there are
two or more mortgagees, and the mortgaged assets are insufficient to pay everyone out.
The legal owner has an equitable interest  equity of redemption.
The legal owner, the mortgagor, can compel the mortgagee to reconvey the property on payment of the debt,
as this is a general law mortgage o If there is a problem arising between the first to second mortgagees’, then
there is a conflict between two equitable interests:
a) The legal mortgagee
b) The third equitable mortgagee
This can be solved by the third mortgagee ‘putting a plank in the shipwreck’ by buying out the legal owner’s
interest which will then give priority over other equitable interests o Bailey v Barnes  equitable owners may
struggle for the legal estate and he who obtains it, having both law and equity on his side, is in a better position
that he who has orbited alone.
Dispute Between Mere Equity and Equitable Interest Mere Equity
Equitable interest which has not yet matured into an equitable interest and only becomes an equitable interest once the court
intervenes.

Eg. the right of an innocent party to get a court to set aside a voidable contract where that contract has been tainted by
fraud
Categories of Mere Equities
1.
2.
3.
Ancillary Equities: Right to set aside a voidable contract or the right in equity of rectification of which fraud and undue
influence are example.
Equity of Acquiescence: Sent to an infringement of rights, either express or implied, from conduct by which the right to
equitable relief is normally lost. This involves the creation of an expectation, a belief in the right to use the land (for
example), with an attempt from the legal owner to rescind from that position.
o Eg. Inwards v Baker (1965)
o Son built a house on his father’s land on the expectation he could stay there for life
o The father dies and the trustee of the state tries to evict the son.
o The court held that there was an equity of acquiescence, where someone spends money on an expectation
induced by the owner, that he can remain on the land.
o In this situation, the equity of acquiescence arises, defeating any purchaser with notice of his interest.
Deserted Wives Equity  Invented by Denning LJ, now replaced by s79 Family Law Act
Rule: Provided that the equitable interest is acquired in good faith for value or consideration, and without notice, the equity will
prevail over the mere equity
Latec Investments v Hotel Terrigal (1965) 113 CLR 265
Facts:




HT owned land and gave the mortgage to Latec.
HT defaulted under the mortgage and Latec sought to exercise its power of mortgagee sale and sell to a wholly owned
subsidiary of Latec, which it did, but for less than the reserved price.
Southern Hotels (SH) then gives MLC and equitable charge over its assets, which include land.
Later HT seeks to set aside the contract on the basis that the power of sale from Latec to SH was exercised fraudulently
Issue: Who had priority between HT, which was accepted as having a mere equity, and MLC.
Outcome:


Court held that MLC was a bone fide purchaser for value without notice, so prevailed over HT.
Court said a bona fide purchaser for value of an equitable interest takes priority over a defrauded mortgages mere
interest to set aside a fraudulent transaction.
65
Possession and Title (Topic 5)
1. Possession (Goods)
Possession as a Common Law Source of Property
“Possession is a legal addition to and an extension of the idea of custody. Where custody (exercised by oneself or by another) is
coupled with the mental element of holding for one’s own purpose, there is possession, and the law gives to the person so in
possession a legal right to continue in possession and be restored to possession should he lose or be deprived of it, against
everyone but the owner… in the case of possession, the law secures the will of the possessor to hold for his own purposes” (E
Pound, An Introduction to American Law,1999)
Elements of Possession
1.
2.
Control of the object i.e., Factual possession
Intention to possess it (animus possidendi)
Without either of these, there can be no possession.
What is possession: Possession is a usual characteristic of ownership, since many objects over which the property rights exist, are
required for the very purpose of possession.
o
o
Through torts, possession is understood to play a central role in a plaintiff wanting to sue for trespass to land (for
example), similarly in conversion or detinue.
For goods, only a person with either possession or an immediate right to possession of goods may sue o In property law,
possession is the corner stone, but not definitive, in a proprietary interest ie. You can be in possession of an object
without owning it
Possession vs. ownership
o
o
o
o
Possession is a right which may be conferred by ownership, while ownership is the entire bundle of rights constituting
property (possession may be a root of title – you can have possession over something without having ownership)
Possession exists where it can be proven that a person is in occupation or control of an object.
Proprietary interest is only established upon proving that an individual has legally enforceable rights against the rest of
the world.
Possession is often a good route of title, but whether an individual has possession will depend upon the character of the
object in question.
Possession as a Source of Proprietary Interests in Goods
o
Possession is of importance for personal property because unlike with land, which has a documentary title system,
possession of personal property is a key indicator of ownership.
Based on quote by Mayo J, Button v Cooper [1947] SASR 286, 292-293
o
o
‘For there to be possession, there must be an intent to possess by the possessor… and it must be effectively realised’ o
‘the possession to be proved must be ‘such a relation to the thing that:
1. So far as regards to the thing, the possessor can assume, exercise or resume manual control of it at pleasure, and
2. So far as regards to other persons, the thing is under the protection of his person presence, or in or on a house of
land occupied by him, or in some receptable belonging to him under his control
Where any of these conditions appear, the person is in physical possession of the thing…’
As to proof of possession, the relationship may be inferred from acts that are consistent therewith, and that are
inconsistent with any more remote association.
1. Rights Against Third Parties
The following case demonstrates that a person who enjoys possession but not title to goods, has rights with respect to goods
against third parties
Jeffries v Great Eastern Railway Co (1856) 5 E&B 802
Facts:
o
The defendant ceased railway truck from the plaintiff’s possession, who claimed them as his own under an assignment
from Owen.
66
o
o
o
o
The defendant tortiously claimed the goods after an assignment from Owen which was after the assignment to the
plaintiff but before the plaintiff took possession.
The defendant proved, prior to the plaintiff getting assignment, Owen was bankrupt, and therefore the railway trucks
title wasn’t help by the plaintiff.
Each party act in good faith to Owen.
As Owen was bankrupt, property rights will have been taken over by his trustee which would have meant that in both
of the sales, Owen didn’t have title.
Issues:
o
o
o
Could the plaintiff recover the value of the trucks in the defendant, Owen though title to the trucks was help in Owen’s
trustee in bankruptcy?
The defendant tried to avoid claims by asserting Jus Tertii, saying that the trustee in bankruptcy interests is superior.
The defendant cannot rely on his own tortious actions that is trespass, he must defend himself on the strength of his
own title, not the weakness of the plaintiff.
Outcome:
o
o
o
o
Court favoured the plaintiff in this situation.
The defendant was not successful as they had no greater right than the plaintiff as well as the fact, he committed a
tortious act in attaining the good - It is important to ensure orderly resolution of competing interests; if defective title
gave right of interference, then it would be a free for all.
For the defendant to have won, he would have had to be the assignee or agent of the third-party owner.
The plaintiff won on two grounds:
1. The plaintiff’s possession was first at the time – having an earlier right can often give you an advantage.
2. The plaintiff’s possession was not connected to a tort.
This results in the plaintiff having possessory right over the defendant, revealing that property law is not just about
working out who is the owner and who is not – it looks at things such as hierarchy.
2. Jus Tertii as a Defence
This is where the defendant pleads a third party has a better title
Henry Berry & Co Pty Ltd v Rushton [1937] QSR 109, 119-120 (Henchman J)
‘A mere stranger cannot be heard to say that one who’s possession he has violated was not entitled to possess. Unless or until a
superior title or justification is shown, existing legal possession is not only presumptive but conclusive evidence of the right to
possess…’
o
When can Jus Tertii be used as a defence in goods:
1. Where the defendant defends the action on behalf of the true owner
2. When the wrongful acts of the defendant were committed with the true owner’s consent
3. Where the plaintiff was never in actual possession: In this situation, the plaintiff would have to rely on the
strength of his proprietary title rather than any prior possession, this proof by the defendant of Just Tertii will
defeat the plaintiffs claim.
3. Possessor Acquires Possession Wrongfully
o
o
A person who has committed a tort remains a wrongdoer and cannot use their victim dealings with other to be relieved
of the consequences of their wrongful acts.
A first possessor may recover in torts against a third party who interferes with goods, as the third party is not permitted
to prove as a defence that title is vested in a third party.
Costello v Chief Constable of Derbyshire Constabulary [2001] 1 WLR 1437
o
o
Even a thief is entitled to the protection of the criminal law against the theft from him of that which himself was stolen.
Possession whether lawfully obtained or not will vest possessory title in the possessor, saving anyone with a better title.
4. Bailors vs Bailees
Henry Berry & Co Pty Ltd v Rushton [1937] QSR 109
o
Bailors under a current contract have no immediate possessory rights
67
Outcome:
o
o
The court held that in the absence of either, proof that a company had given notice of its intention to resume
possession, or of proof that property has been abandoned, a company has no possession or right to immediate
possession, thus cannot sue for trespass or detinue.
Three rules that came from this case:
1. If goods are in possession of the plaintiff at the time of interference, it is no defence to show a right of title in
some third party.
2. A plaintiff who has never been in possession must recover on the strength of title, and therefore cannot succeed
where a third party shows a better title.
3. In cases of bailment, the bailor has no right of possession until the contract has been terminated.
The Wunkfield [1900-3] All ER Rep 246
o
o
Claim by the bailee against third party.
Possession is ab absolute and compete title against a wrongdoer and he cannot set up a just tertii unless he claims
under it, an so the wrongdoer who is not defending under the title of a bailor is quite unconcerned with what the rights
are as between the bailor and the bailee and must treat the person in possession of the goods bailed as their owner for
al purposes irrespective of the rights and obligations as between that person and the bailor
Outcome
o
o
o
o
o
The Postmaster, General Bailee of the mail, was entitled to compensation for the value of the betters and packaged that
had been lost at sea, even though he was at no liability to the owners
The court held that it is not open for the defendant, being a wrongdoer, to inquire into the nature or limitation of the
possessors right and unless it is contempt for him to do so - The question of his relation to or liability towards the true
owner cannot come into discussion.
Thus, as between those two parties, full damages are to be paid without any injury.
The rule that all bailees may recover the full value of the chattel, even though not liable to the bailor for the loss, is an
exception to the title that damages are compensatory.
As against a wrongdoer, possession is title – once the wrongdoer pays full price to the bailee, he has an answer to an
action by the bailor, but he who restores to a person other than the bailee will have no defence to a subsequent action
by the owner.
City Motors (1933) Pty Ltd v Southern Aerial Super Service Pty Ltd (1961) 106 CLR 477
o
Protection of a bailee’s possession against a bailor
Outcome
o
o
The court held that the respondents title to the possession as bailee of the new motor vehicle was sufficient to support
an action in detinue and that the appellant as bailor was compelled to restore it.
Similar to Costello  Even a person who is in wrongful possession may enjoy rights against third parties – his rights are
similar to that of an innocent finder.
Wilson v Lombank Ltd [1963] 1 All ER 740
o
o
While a wrongful possessor is in possession, his or her rights are similar to that of an innocent finder. If A is in wrongful
possession, and is wrongfully dispossessed by B, who is later wrongfully possessed by C, A can sue B but not C.
A wrongful possessor, not in possession of goods at the date of the wrongful act, can be met by the defence that
another is the owner of the goods – the wrongful possessor may acquire title if the owner fails to claim ownership
within 6 years.
Outcome
o
The court held that the plaintiff had constructed possession of the car at the time it was taken by the defendant o
Leaving it at the garage had not been a surrender of possession, therefore the plaintiff was entitled to recover damages
in trespass since he had a better right, all but the true owner – it was irrelevant that the plaintiff didn’t own the car and
that the defendant had returned it to the true owner
68
o
o
o
Thus, the plaintiff in spite of leaving the car at the garage, still had possession because even though he hadn’t paid for
the repairs, it was at the garage awaiting his return.
A bailor still had possession when he can demand immediate return – if the bailment had not been at will, the bailment
would have enjoyed an exclusive right of action.
This illustrates the courts’ view that the rights of a third person should be ignored.
5. Sales of Goods Act 1895
It is important to know exactly when ownership passes as regards the passage of risk, plus, the Act also gives exceptions to the
nemo dat quod non habet rule (no one can give a title to something that they do not themselves hold)
Section 12: Implied undertakings as to title:
The sellers right to sell, buyers’ quiet possession of goods, and goods free of undeclared encumbrances.
Section 16: For sale of unascertained goods
Goods must be ascertained.
Section 17: Property passes when intended to pass
Contract, conduct and circumstances.
Section 18: Unless a different intention appears, see the five rules for ascertaining intention.
Section 19: Reservation of right of disposal.
… reserve the right of the disposal of the goods until certain conditions are fulfilled…
Section 20: Risk, prima facie, passes with property
… the goods remain at the sellers’ risk until the property therein is transferred to the buyer…
Section 21: Sale by person not the true owner (Exception to namo dat)
… the buyer acquires no better title to the goods than the seller had…
Section 22: Market overt (exception namo dat)
… the buyer acquires a good title to the goods …
Section 23: Sale under voidable title
… the buyer acquires a good title to the goods …
Section 24: Revesting of property in stolen goods on conviction of offender
Property in the goods stolen revests in the person who was the owner of the goods …
Section 25: Seller or buyer in possession after sale:
1. Where a person having sold goods continues or is in possession of the goods…
2. Where a person having bought or agreed to buy goods obtains, with the consent of the seller, possession of the
goods…
*Important to keep in mind that in relation to the sale of an object, in the case of land, the namo dat rule is treated very
differently – do not confuse this with risk and title of goods with land.
What does Nemo dat rule mean? No person may confer a better title to land or goods than that person in fact has. The rule is
based on the simple proposition that if one does not own something, one cannot sell it.
6. Section 18: Five Rules for Ascertaining Intention
Rule 1: Where there is an unconditional contract for the sale of specific goods, in a deliverable state, the property in the goods
passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or
both, be postponed.
Rule 2: Where there is a contract for the sale of specific goods, and the seller is bound to do something to the goods for the
purpose of putting them into a deliverable state, the property does not pass until such thing be done, and the buyer has notice
thereof
Rule 3: Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure,
test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not
pass until such act or thing be done, and the buyer has notice thereof.
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Rule 4: When goods are delivered to the buyer on approval or on ‘sale or return’, or other similar terms, the property therein
passes to the buyer: a) When he signified his approval or acceptance to the seller, or does any other act adopting the
transaction; b) If he does not signify his approval or acceptance to the seller, but retains the goods without giving notice of
rejection, then, if a time has been fixed for the return of the goods, on the expiration of such time, and, if no time has been fixed
on the expiration of a reasonable time. What is a reasonable time is a question of fact.
Rule 5 (1): Where there is a contract for the sale of unascertained or future goods by description, the goods of that description
and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer, or by
the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or
implied and may be given either before or after the appropriation is made.
Rule 5 (2): Where, in pursuance of the contract, the seller delivers the goods to the buyer to a carrier or other bailee or
custodian (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of
disposal, he is deemed to have unconditionally appropriated the goods to the contract Further comments: Ownership usually
passes from the seller to the buyer at the time agreed upon by the parties but in the absence of expressed agreement, the
passing of ownership determined in the five rules. Buyer becomes the owner of the goods for two reasons:
1.
As a general rule, if the goods are lost or damaged, the loss is born by whoever owns the goods at the time,
although if one of the parties has caused the delivery to be delayed, the goods are at the risk of the party. If the
goods belong to one party but are in possession of another, the party in possession must take reasonable care of
them as this is a bailment.
2.
You cannot pass onto someone something you don’t have. If the buyer sells goods to another person, they cannot
pass on ownership unless they have already become the owner. Exceptions include:

A seller who is not the owner of the goods can still pass on title to a buyer in the circumstances that are seen
set out. E.g.,  Seller is the authorised agent of the owner of the goods/the goods are sold to an open and
public buyer who has no notice of the owner’s lack of ownership.

The seller has already sold the goods to someone else but retained possession and has now sold the goods
again to a buyer who has no notice of the seller’s lack of ownership.

The seller has brought the goods from someone else acquiring possession of the goods but without
acquiring full ownership and has now sold the goods to a buyer who has no notice of the seller’s lack of
ownership.

Seller is exercising a statutory power of sale E.g. Mortgagee
Establishing Possession: What are some Issues?
1. Control


The first thing that needs to be established is the nature of the object in possession  possession can be actual or
constructive o Secondly, what are the circumstances surrounding possession?
Control is the key factor in establishing possession
Cases:
Young v Hitchens (1844) 6 WB 606 – control is the key factor.


Fish at common law are classed as fera naturae – for wild animals, only a qualified right of property can be acquired in
them, a right which is wholly lost when escaping from their captor, without the intention of returning and resume their
former freedom.
The judge found in favour of the defendant as the plaintiff had no control of the fish o If control is therefore needed for
the possession of goods, the control must be considered.
The Tubantia (1924) P78 – possession will be assessed having regard to the nature of the object and the acts of possession o



Here, the plaintiff sued in trespass for possession  the issue for the court was either the plaintiff had sufficiently
possessed the Tubantia Ship
The court held that a thing taken by a person of his own motion and for himself and subject in his hands or under his
control to the uses of which it is capable, is in that person possession.
Questions for the court:
o What are the kinds of physical control and use of which the object in question was practically capable? • Could
physical control be applied to the object as a whole?
o Had there been a complete taking?
70
o
o
Had the plaintiff’s occupation been sufficient for practical purposes to exclude strangers from interfering with
the object?
Was there animus possidendi? The court found that in fact there was animus possidendi, there was use
occupation of which subject matter was capable.
Chairman, NCA v Flack (1998) FCR 16 – knowledge that an item exists is not necessary to prove evidence of control.



The issue for the court was whether Mrs Flack, as occupier, had manifested sufficient intention to occupy all chattels,
including the briefcase and money, known and unknown, which were on her premises.
The court held, as per Heerey J, since Mrs Flack was the tenant of an ordinary residential house, she has possession in
law of those premises – if she owns the home, she has intention to control all that is within the home, therefore her
prior possessory interest, through her manifestation of control, is enough to defeat the police.
In the circumstances, the facts were sufficient to establish the requisite manifestation to possess all chattels on the
premises. The right of Mrs Flack therefore becomes superior to those of the police, demonstrated by control over her
premises.
2. Lost Goods vs Abandoned Goods
Lost: The owner has ceased to have control of an object and cannot locate it or alternatively, the owner leaves an object in a
public place and cannot readily recover it
Abandoned: Goods left where the owner has no intention of reclaiming them, or, where the owner hides them but later decides
not to reclaim them – when something is abandoned, the law wants to create new proprietary rights for it, thus, when we
establish abandonment, the true surrenders all proprietary rights they have over that object
*Note, goods are not lost or abandoned merely because the identity of the owner cannot be established via a third party
Why is abandonment and lost treated differently: Where goods are lost, the primary aim of the law is to assist in the return of
the goods to the true owner. But when the goods are abandoned (i.e.. The gods cannot be identified) they must be relocated so
as to permit their effective use while at the same time reducing the risk of further dispute as to title.
Jigrose [1994] 1 Qd R 382, 285-386 (Kiefel J)
“If I throw something away, I surely abandon it, I intend to no longer retain that possession. I do not propose to seek it
out and I have no further interest in ownership. If, however, I lose something, I have not chosen those intention… titles
remain with the original acquirer of the property until there is shown an intention to abandon it. It then becomes of
public right and is liable to be approached by the next occupier … abandonment divests ownership”.


Ie. The importance of the owner in determining where a chattel is abandoned o The court found in favour of
the purchaser of the land starting that there is a different between loosing and abandoning something – the
significance lies in the intention of the owner.
Interestingly, there are a few things that are capable of being acquired after abandonment due to the rights of
a landowner in relation to objects attached to the land.
Moffat v Kazana [1969] 1 Qb 152


Bank notes found in chimney flue did not pass on sale of the house.
Lost and forgotten is not abandoned.
Keene v Carter (1994) 12 WAR 20, 26 (Ipp J)
“… the mere fact that a chattel has been lost does not lead to an inference that it has been abandoned… regards the lost
thing of being of little value, or of no personal importance to him or her. Inferences may be drawn of an intention to
abandon such matters as the value of the chattel, the circumstances under which and where it was lost, the length of
time for which it has been lost, and the attempts that the owner had made to ascertain its whereabouts” He then notes
that it was be difficult to inferentially establish abandonment.


The nugget had been purchased by a third party.
The court had to determine what the difference was between being lost and being abandoned.
Historic Shipwrecks Act 1976 (Cth) – abandonment in fact, but not law. On the special position of wrecks under maritime law
and objects which may be otherwise abandoned but vest in the State
3. Finder’s rights vs Occupiers Rights (as established by Parker v British Airways Board [1982] 1 All ER 834 at 843 (Donaldson LJ)

A finder generally has control when things are found on but not attached to land to which the public enjoys access as
they are not controlled by the possessor of that land – there needs to be a clear intent or evidence to manifest control.
71



The plaintiff complains that as finer of the chattel, he had taken control of the object. The defendant claims that as
occupier of the land, they have rights over all lost chattels on the land, whether or not they knew of their existence.
The court held that there was an insufficient manifestation of many intentions to exercise control over the lost property
of the defendants, given that there was public access to the lounge, as distinct from the private residence in Flack case
If there is a notice, eg ‘anything found on this premise is to be surrendered to British Airways lost property’ shows
manifestation to control and one way the defendant would be able to escape liability
4. Rights and Obligations of the Finder
1) The finder of a chattel acquires no rights over it unless
a) It has been abandoned or lost; and
b) He takes it into his care and control.
2) The finder of a chattel acquires very limited rights over it if he takes it into his care and control with dishonest intent or in
the course of trespassing.
3) A finder of a chattel, whilst not acquiring any absolute proprietary or ownership in the chattel, acquires a right to keep it
against all but the true owner…
4) Unless otherwise agreed, any servant or agent who finds a chattel in the course of his employment or agency and not wholly
incidentally or collaterally thereto and who takes it into his care and control does so on behalf of his employer or principle
who acquires a finder’s rights to the exclusion of those of the actual finder ‘
5) A person having a finder’s rights has an obligation to take such measures as in all the circumstances where reasonable to
acquaint the true owner of the finding and present whereabouts of the chattel and to care for it meanwhile.
5. Rights and Obligations of the Occupier
1) An occupier of land has rights superior to those of a finder over chattels in or attached to that land…
2) An occupier of a building has rights superior to those of a finder over chattels on or in, but not attached to, that building
3) An occupier who manifests an intention to exercise control over a building and the things which may be on ir it in so as to
acquire rights superior to those of a finder is under obligation to take such measures as in all the circumstances are
reasonable to ensure that lost chattels are found and, on their being found, whether by him or a third party, to acquaint the
true owner of the finding and to care for the chattels meanwhile
4) An ‘occupier’ of a chattel, eg. A ship, motor car, caravan or aircraft, is to be treated as if he were the occupier of a building
for the purposes of the foregoing rules.
Donaldson J, in Parker v British Airways [1982] 1 QB 1004


Found that the defendant’s level of control did not extend to cover lost items found in the airport lounge o If the
defendant has posted signs urging passengers to return lost items to them, then the result would have been very
different (even though its usually the opposite saying that the company doesn’t take responsibility for items lost or left
unattended etc)
Overall, goods found in a place, which are not subject to manifest control by an occupier, leave it open for a finder to
acquire a title when taking that item into their custody which is then good against everyone but the true owner.
6. Prominent Case Law

Amory v Delamirie (1722) 93 ER 664
o A finder who passes an item to a third party for a legitimate but temporary purpose retains a superior title

City of London Corp v Appleyard [1963] WLR 982
o Between occupiers and owners of land, occupiers will often have the stronger claim to demonstrate control,
but consider if there is a contract…

South Staffordshire Water Co v Sharman [1896] 2 QB 44
o Possession of land  prima facie right of possession to everything attached to or in the land, even without
knowledge. So, a possessor of land is generally entitled, as against a finder, to chattels found on the land.
o As chattels are treated as an integral part of the realty against all but the true owner, and the rings are treated
as chattels, the plaintiff, and not the occupier, were entitled to keep the rings.
o Note: The plaintiff only had right to be on the owner’s land by reference to their license, that was to attend to
their pool, not to go treasure hunting – as the ring was in the mud, it was considered to be a part of the land,
72
thus the owners have greater rights

Hibbert v McKiernan [1948] 2 K 142
o Abandoned golf balls found on land by trespassers.
o Clear efforts by the occupier to control publicity accessible land  sufficient control for title to the occupier.
o Where a finder is not a wrongdoer, they have some rights, but the occupier of the land will have better title
o Of significance is that the occupier control how much water was to be disposed of
o The rationale is that the chattel is being treated as part of the land so is therefore incapable of being lost
against all but the true owner.
o Alternatively, the finder can only explain his presence on the land by virtue of license granted by the occupier
and with this license, he is trespassing, and so therefore, the finding of the rings can only be explained by way
of license.

As per Lord Goddard CJ – Every occupier means or intends to exclude thieves and wrongdoers from
the property of which he is in possession, and this confers on him a special property in goods found on
his land.

As per Pritchard J – It must appear that the occupiers intend to exclude others from interference with
the goods and that they had over them a degree of power which was sufficient to give effect to such
intent.
Criminal and Found Property Disposal Act 2006 (WA)
Regulated properties:




Section 14: Receipt of property
Section 15: Found property that is wholly or partly prohibited property.
Section 17: Disposal of perishable or dangerous property
Section 18: Disposal of unregulated property
Unregulated properties:







Section 22: Measure to ascertain who is entitled.
Section 23: Finder of the property may be treated as owner in some cases.
Section 24: Making of claim to property.
Section 25: Dealing with claims to property.
Section 26: Disputed claims etc.
Section 27: Court’s power on disputed claims
Section 33: Sale of property

Section 34: Title to property disposed of under this act… including its true owner and no person may recover from the
State any compensation.
o Unlike a common law where a true owner remains the ultimately superior right in relation to the object, under
this act, the true owners title is displaced where title to the object is disposed of under this act – the true
owner has no claim to any compensation for the loss of this title.
o This section overrides the true owner.
o The party who wins isn’t necessarily recognised as the true owner, more so a superior claim.
2. POSSESSION AND TITLE (LAND)
Not only title to goods that may be acquired by possession, but title to land may also be acquired through possession.
1. Possession as a Common Law Source of Property


“Possession is a legal addition to and an extension of the idea of custody. Where custody (exercised by oneself or by
another) is coupled with the mental element of holding for one’s own purpose, there is possession, and the law gives to
the person so in possession a legal right to continue in possession and be restored to possession should he lose or be
deprived of it, against everyone but the owner … in the case of possession, the law secures the will of the possessor to
hold for his own purposes.” (E. Pound, An Introduction to American Law, 1999)
Possession is a legal concept with two elements:
1. Control of the object i.e., factual possession; and
2. Intention to possess it (animus possidendi)
73

Possession vs ownership: Possession is a right which may be conferred by ownership, while ownership is the entire
bundle of rights constituting property. Possession may be a root of title.
2. Possession as a Source of Proprietary Interest in Land
Seisin (Historical context only)






“It is difficult to define seisin satisfactorily. It has nothing to do with ‘seizing’ with its implication of violence. To medieval
lawyers, it suggested the very opposite: peace and quiet … seisin … denotes quiet possession of land, but quiet
possession of a particular kind … although it seems impossible to frame a satisfactory definition … to call it ‘that feudal
possession of land with which only the owner of a free estate in freehold land could have’ is to express the most
important elements.” (Black’s Law Dictionary, 8th ed, p 1389.)
“Seisin highlights the deeply embedded significance of possession in the evolution of proprietary title.” (S Hepburn)
Only a person who held Seisin of free held land could sue for recovery.
Was all about you having a better right to possession than someone else.
McGarry and Wade: littler interest today in preserving any distinction between Seisin and possession – it is possession
that forms the recognised route of title.
Also, now possible to prove a proprietary title without needing to establish possession
The lasting influence of Seisin



It is Seisin that introduced the concept of relativity of title.
No interest in property is destructible and always will give way to a better right in possession.
Toohey J: “… English land law in 1789 and now, conferred an estate in fee simple on a person in possession of land
enforceable against all the world except a person with a better claim.” (Mabo v State of Queensland (1992) 175 CLR 1)
o
Toohey further stated ‘so long as it is enjoyed, possession gives rise to rights, including the right to defend
possession or to sell or devise the interest. A defendant in possession acquires Seisin, even if possession is
tortiously acquired – that is, the person in possession has an estate in fee simple in the land.
o
Seems extraordinary that a person could acquire Seisin whilst having possession that was tortious.
3. Possession in Land



Possession in land is akin to possession of chattels.
Possession in land is prima face evidence of a right to possession of title.
Possession establishes a right to the land against anyone who cannot prove a superior title.
Two Elements of Possession
1.
2.
Physical Control: continuous and constituted by acts characteristic of ownership ie. fencing
Intention to Possess: towards the exclusion of the world at large.
In practice these two elements are difficult to separate because a possessor’s intention is often derived from the physical act
itself eg. fencing. Thus, possessing and intention to possess, and the exclusion of the others equals title.

The manifestation on physical control will depend upon the nature, characteristics and value of the land.

Lord Advocate v Lord Lovate (1880) 5 AC 273, 286
o Case involving a claim in fishing rights in a river, Lord O’Hagan states  “The acts implying possession in one
case may be wholly inadequate to prove it in another. The character and value of the property, the suitable and
natural mode of using it, the course of conduct which the proprietor might reasonably expect it to follow, with
due regard to his own interests; all greatly varying, as they must under various conditions, are to be taken into
account”.

Redhouse Farms v Catchpole (1977)121 SOLJO 136
o A person who hunted game on land, which could be used for nothing else, acquired possession of it.
o Ie. slight but not trivial acts can be used to gain possession of land of little worth.
Title to the Land


If possession is established, this can give rise to title to the land.
This is seen in Perry v Clisshold, which established that possessive title applied in Australia.
o Resumption of land occupied by exclusive possession, fenced, received profits and paid rates, named in rates
book, and without notice of adverse claim, true owner unknown
74
Perry v Clisshold [1907] AC 73





In 1881 C occupied vacant land
Rightful owner was unknown.
C fenced the land, paid rates on the land, and rented part of the land out
However, in 1891, the Crown acquired the land under compulsory acquisition powers in order to build a school.
By this time C was deceased but his executor’s claimed compensation
Outcome:






Court held that since C had possessory title against everyone accept the rightful owner at the time of resumption, he
was entitled to compensation.
McNaughton L stated: It cannot be disputed that a person in possession of land, in the assumed character of owner, and
exercising peacefully the ordinary rights of ownership, has a perfectly good title against all the world but the rightful
owner.
Interestingly, during his judgment, McNaughton L noted that the statutory provisions in questions, which allowed the
Crown to resume the land, contemplated the payment of compensation for all persons having a secure title in the land
which had been resumed – it did not matter whether that title was proprietary or possessory.
C was not a mere trespasser but had a possessory title, good at the date of resumption against everyone but the rightful
owner
In course of becoming absolute as against him, having been deprived of the land, C had a prima face case for
compensation.
By acquiring the land by compulsory acquisition, the minister of the Crown also acquired the title of the rightful owner.
Asher v Whitlock (1865) LR 1QB 1


Had earlier confirmed in England that possession could give rise to title so that a beneficiary to whom an adverse
possessor had devised his interest by will, was entitled to enforce it against an intruder.
Court held that a person in possession of land without other title, had a devisable interest; and a person inheriting that
interest can maintain ejectment against a person who is entered upon the land and who cannot show title or possession
in anyone prior to the testator.
Facts:



W enclosed some wasteland which had been owned by a lord – he built a cottage on it which he lived until his death,
some 18 years later
In his will, W left the land to his wife during her widowhood and after her death, or re-marriage, to his daughter MaryAnne
Only 1 year later, she married Whitlock who survived both the wife and daughter – later the heirs of his daughter MaryAnne, Asher’s brought ejectment proceedings against Whitlock.
Outcome:






The court held that Asher’s was entitled to recover the whole property.
Upon re-marriage the wife’s right to possession passed immediately to Mary-Anne and then upon her death, Asher so
they were entitled to the property.
Whitlock had no right against the testator or Mary-Anne’s interest.
Ie. a possessor can have a right to use, enjoy, sell or devise his title, despite not being the true owner.
Here, the court is allowing a prior possessory title which was devised to the plaintiff to defeat the defendant, who at the
time of the action wasn’t in actual possession.
o The success of the plaintiff’s claim, despite the fact that a third party was the true owner, was considered
sufficient evidence that the defence of jus tertii was not available to land claims.
This case is commonly used as authority for jus tertii, not applying to land claims, although the case doesn’t directly
raise this point.
o The reason jus tertii cannot apply to land is that it would undermine the relativity of title.
75
Wilkinson v Madorsky [1914] 16 WALR 164





The plaintiff purchased certain land from the registered owner and a necessary document was signed, under which the
plaintiff then took possession of the land.
The document however, which should have been registered was never actually registered.
At the time when the plaintiff took possession of the land, there was an advertisement sign standing on and affixed to
the land  this stated that the defendant claimed the land as his own, and while the plaintiff was in possession of the
land, the defendant then entered upon the land and removed hoarding.
Court held that the defendant had failed to satisfy the court either that he had any right to enter onto the land or
remove the hoarding.
The plaintiff, although not registered as owner, had the ordinary right of the person in possession to maintain an action
against a trespasser.
Documentary title vs wrongdoer





A person with documentary title is in quite a different position to a wrongdoer who claims possession.
An owner might establish possession through the slightest act in relation to the land, indeed, in the absence of any
evidence to the contrary, the owner is presumed to be in possession for they enjoy a prima face right to possession.
On the other hand, a wrongdoer must prove strictly that he has acquired possession of the land through the
performance with the requisite intention of acts characteristic of ownership.
A person who has documentary title, even under invalid conveyance, when entering land, will be presumed to be in
possession of the whole of the land.
A wrongdoer is only in possession of that part actually occupied, unless it is part of a distinct hold.
4. Doctrine of Adverse Possession
Middelton v Young (Unreported 17 March 1969) SCWA 00634 stated: Adverse possession is the possession of land by those
against whom the true owner has, or is deemed to have an accrued right of action




Adverse possession in WA operates as an exception to the title that someone may enjoy once they are registered as the
owner of land.
This can be seen in s68 TLA.
Torrens System recognises title by registration, not registration by title, but the title of registration is subject to adverse
possession, as a recognised exception
Ie. someone who is held to be in adverse possession of land for the relevant period, can defeat the interests of the
registered owner.
Necessary Elements and Determinacy of Adverse Possession
Petkov v Lucerne Nominees (1992) 7 WAR 163


Held: possession in fact which continuous and exclusive must be shown, plus a conscious intention to possess the land
to the exclusion of all other parties. The facts of each case will be decisive
Murray J: “It will be convenient to begin by restating a few basic principles relating to the concept of possession under
English law”
Basic Principles as per Murray J:
1.
2.
3.
In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession
of the land, as being the person with the prima facie right to possession. The law will thus, without reluctance,
ascribe possession either to the paper owner or to persons who can establish a title as claiming through the paper
owner. [i.e., this creates a presumption in favour of true owner].
If the law is to attribute possession of land to a person who can establish no paper title to possession, he must be
shown to have both factual possession and the requisite intention to possess (animus possidendi).
Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive
possession, though there can be a single possession exercised by or on behalf of several persons jointly. Thus, an
owner of land and a person intruding on that land without his consent cannot both be in possession of the land at
the same time. The question 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
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used or enjoyed … It is impossible to generalise with any precision as to what acts will or will not suffice to
evidence factual possession … Everything must depend on the particular circumstances, but broadly, I think what
must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in
question as an occupying owner might have been expected to deal with it and that no-one else has done so.

Note the factual possession must be open, peaceful, not secret, and not by consent (Mulcahy v
Curramore Pty Ltd [1974] 2 NSWLR 464
4.
The animus possidendi, which is also necessary to constitute possession, … involves the intention, in one's own
name and on one's own behalf, to exclude the world at large, including the owner with the paper title if he be not
himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow … the
courts will, in my judgment, require clear and affirmative evidence that the trespasser, claiming that he has
acquired possession, not only had the requisite intention to possess, but made such intention clear to the world.
If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by
his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not
having had the requisition animus possidendi and consequently as not having dispossessed the owner.”
Other things to note with adverse possession:
Ghilarducci v Ghilarducci (1993) 134 ANZ ConvR 331, 331-332

Malcom CJ: “The acquisition of a possessory title by adverse possession in Western Australia requires the adverse
possessor to be in continual possession of the relevant land without the license of the true owner and to the exclusion
of the true owner for a period of not less than 12 years."
McWhirter v Emerson-Elliott [1960] WAR 208 at 213, 215: This case sets out how we decide whether there is adverse
possession.


It’s important that we consider the nature of the property and use that the owner might actually be expected to make
of it.
Wolff CJ: “In deciding whether there is adverse possession it is relevant to consider the nature of the property and the
use which the owner might reasonably be expected to make of it. The possession must be adverse in the sense that the
person claiming it is using it to the exclusion of the owner…The possession must be continuous …To sum up …Gavan
Duffy J, in Maguire v Browne (1913) 17 CLR 365 at p369: 'The dispossession and discontinuance …have been held to
connote the existence of a person who has dispossessed such owner and kept him dispossessed for a period of 12 years,
or the abandonment of possession for such a period by the owner and the possession by some other person during the
same period to be protected ……adverse possession should be construed in accordance with the meaning given in the
term “possession” in the Limitation Act 1935”
Petkov v Lucerne Nominees (1992) 7 WAR 163

Murray J: “The mental element in the requisite intention to possess will also be of great importance but must be
understood. When the law speaks of an intention to exclude the world at large, including the true owner, it does not
mean that there must be a conscious intention to exclude the true owner. What is required is an intention to exercise
exclusive control...And on that basis an intention to control the land, the adverse possessor actually believing himself or
herself to be the true owner, is quite sufficient”.
The Implied License Doctrine


Was held in Clement v Jones (1909) 8 CLR 133 that inconsistent use is a requirement.
In Clement v Jones, at 140, Griffith CJ: Acts must be done which were inconsistent with the enjoyment of the land by
the true owners for the purposes for which they would be likely to use it.
Whittlesea CC v Abbatangelo [2009] VSCA 188


Whittlesea sets out some very useful practical points in relation to considering facts of adverse possession.
The Abbatangelo decision is interesting because it focuses upon the question of fencing, which is a powerful factor in
support of both factual possession and an intention to possess.
77

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Control of entry to land is clear, and arguably the best evidence of exclusive physical control over the land, and intention
to exert that control, however, just because a fence exists upon an incorrect boundary, is not of itself sufficient to prove
intention to exclude the rest of the world.
The acts of Abbatangelo in repairing and constructing fencing contributed significantly to the overall finding that she did
meet the required intention.
The actions of the Abbatangelo’s over the land, in particular repairs and construction of a boundary fence were
indicative of intention to exercise exclusive control.
Court stated that no matter how easy it may have been to get through a fence, the very existence of the fence was a
sign to mall those who saw it not to enter.
Issue: Not whether the Abbatangelo’s has done their best to exclude the counsel, but whether it could be inferred from the acts
that she intended to exercise custody and control of the land for herself.
Whittlesea CC v Abbatangelo principles on practical points
These are the principles in relation to factual possession and intention to possess.
Enclosure by itself prima facie indicates the requisite animus possidendi;
It is no use for an alleged adverse possessor to rely on acts which are merely equivocal as regards the intention to
exclude the true owner;
3. A person asserting a claim to adverse possession may do so in reliance upon possession and intention to possess on the
part of predecessors in title. Periods of possession may be aggregated, so long as there is no gap in possession.
4. Acts of possession with respect to only part of land claimed by way of adverse possession may in all the circumstances
constitute acts of possession with respect to all the land claimed;
5. Where a claimant originally enters upon land as a trespasser, authority and principle are consistent in saying that the
claimant should be required to produce compelling evidence of intention to possess; in which circumstances acts said to
indicate an intention to possess might readily be regarded as equivocal;
6. Whether or not the paper owner realises that dispossession has taken place is irrelevant;
7. The intention to possess may be, and frequently is, deduced from the objective acts of physical possession;
8. In considering whether the putative adverse possessor has factual possession, a court has regard to all the facts and
circumstances of the case, including the nature, position and characteristics of the land, the uses that are available and
the course of conduct which an owner might be expected to follow.
9. A number of acts which, considered separately, might appear equivocal may, considered collectively, unequivocally
evidence the requisite intention.
10. Statements about intention by a putative adverse possessor should be treated cautiously.
11. Mere use falling short of possession will not suffice. In some circumstances, a person’s use of land may amount to
enjoyment of a special benefit from the land by casual acts of trespass and will neither constitute factual possession nor
demonstrate the requisite intention to possess.
1.
2.
Practical point - burden
Clement v Jones


HC noted that where a complete documentary title is proven, then the burden is shifted to the possessor to show the
applicants original title had been defeated.
Although burden is important, there may be other reasons why other are upon land.
Practical point – relations
McWhirter v Emerson-Elliott


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Relations often accord privileges to one another which would not be given to strangers.
In this situation, this may not be sufficient to establish possession – it may be a mere license.
This can be compared with the comments in Abbatangelo that common acts of trespass mounting to enjoyment of a
special benefit, such as where a neighbour occasionally grazes animals on vacant land, or where children occasionally
play, may not be sufficient.
When Adverse Possession has run its Course


If adverse possession for the relevant statutory period has run, what is the effect of that?
A possessor is not entitled to possession against the true owner unless the true owner has been kept dispossessed or
has abandoned possession for the statutory period.
78


Petkov v Lucerne Nominees:
o
The limitation period accrues when the registered proprietor or his predecessor in title has been in possession
of land, and while entitled there to, has been dispossessed or discontinued possession.
o
At the end of the limitation period, the right of action for recovery of the land is barred and the title to the land
is lost.
At common law, the better view is that, upon this occurring, legal fee-simple ownership is not transferred, but rather a
negative title exists.

McGellin & Fuchsbichler v Button: ‘it extinguishes the right in title of the dispossessed owner and leaves the occupant
with a title gained by the fact of possession, and resting on the infirmity of the right of others to reject him’.
o
This must now be read in light of the limitations act, s75 2005, providing that a person’s right in title to land is
extinguished if a person does not commence an action to recover the land before the expiry of the limitation
period

Mulchahy v Curramore Pty Ltd  nature of the possessory title acquired in the case of successive trespassers.
o
Upon the extinguishment of the true owner’s title, the title in the fee simple will go to the first of the
successive trespassers. The final trespasser will, by virtue of possession, have a title in fee simple against all the
world except the preceding trespassers, and a title good against them also, if each had abandoned possession
5. Statutory Provisions in WA
Relevant Provisions within the Transfer of Land Act (TLA)

The TLA in WA is the statute which the Torrens System of land registration operates under – most, but not all, privately
owned land in WA is held under the Torrens System, and it is a system which establishes title by registration, not
registration of title.
McWhirter v Emerson-Elliott
Facts:

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


Plaintiffs were an owner of an orchard claiming title by possession to 5 pieces of land which totalled to about ½ acre.
Since 1933, when they first acquired a property, the plaintiff’s had, without any objection from the registered owners of
adjoining property, Lornebrooke (female plaintiffs’ parents), made an occasional use of these pieces of land from time
to time to grow fruit trees, although their main value was as a means of access to a nearby creek to obtain water.
The owners of the adjoining property Lornebrooke had themselves until 1942, made some use of the land, the plaintiff’s
father having tipped the rose cuttings on part of the land.
In February 1942 the plaintiff’s father told the daughter that he would give her these pieces of land, signing a document
to that effect, however, in 1950, having in the meantime acquired full title, he sold Lornebrooke but made no mention
to the purchaser of the gift to his daughter.
The purchaser was subsequently informed of the gift by the male plaintiff and accepted the situation.
In 1952, Lornebrooke was again sold and once again, no mention was made of the gift, until later when the plaintiff’s
informed the new purchasers – though they did not acknowledge the plaintiff’s rights, took no definite action to
establish themselves in possession of the disputed land.
In 1958, the defendant purchased Lornebrooke with knowledge that the plaintiff’s claimed the pieces of land in
question.
The defendant then had a survey made and built a fence along the boundary.
Outcome:


Wolff CJ confirms that the TLA 1893 deals with a subject of title by possession in a sketchy way, through recognising
adverse possession as an exception to indefeasibility of title under s68.
Goes on to provide a procedure of registration of possessory title under s222:
a. An express exception to Torrens indefeasibility of title: “the land which shall be included in any certificate of
title or registered instrument shall be deemed to be subject to …any rights subsisting under any adverse
possession of such land…’ (s 68 (1A) TLA)
 Petkov v Lucerne Nominees (1992) 7 WAR 163 (Murray J) affirmed adverse possession as an exception
to indefeasibility of title under TLA, s 68.
b. A person claiming title under statute of limitations may apply to be registered (s 222 TLA)
79
c.
Upon such registry being affected the applicant shall become the transferee of such land and be deemed to be
the proprietor thereof (s 223(2) TLA)
Relevant Provisions within the Limitations Act
In Whittlesea: adverse possession is construed in accordance with the meaning given to possession in the Limitation Act. In WA,
there are 2 Limitation Act  Limitation Act 1935 and Limitation Act 2005 (advises us on actions arising after 15 Nov 2005)


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

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




s19  An action to recover land cannot be commenced if 12 years have elapsed since the cause of action accrued.
s65  A cause of action to recover land does not accrue unless the land is in adverse possession (i.e., go back and
consider common law)
s65(2)  If a cause of action accrues to recover land from a person in adverse possession of the land; and afterwards,
the land is in the adverse possession of a second person, whether the second person claims through the first person or
not the cause of action to recover the land from the second person accrues when the cause of action accrues from the
first person o Adverse possession can run from one person to another  the second person may add to his possessory
period, the earlier period of the first possessor, provided it is continuous
s 65(3)  If a cause of action to recover land accrues and afterwards, but before the limitation period expires, the land
ceases to be in adverse possession, the cause of action does not accrue unless and until adverse possession of the land
is taken again
s66  A cause of action to recover land by a person who has been in possession of the land and, while entitled to the
land, is dispossessed or discontinues possession, accrues when the person is dispossessed, or discontinues the
possession.
s67  A cause of action to recover the land of a deceased person (whether under a will or on intestacy) accrues when
the deceased died…
s68  Grantor in possession
s69  Future interests in land
s75  A person’s right and title to land is extinguished if the person does not commence an action to recover the land
before the expiry of the limitation period.
ss19(2)/s76/s36  No title by adverse possession against Crown
o It is possible in a number of situations to closely qualify that.
S77  Future interests in land
S78  Provisions in case of land held on trust.
Common Arguments Against Adverse Possession

It is simply legalised land theft.
o JA Pye (Oxford) Ltd v Graham provides for a very scathing review of adverse possession.
o “If … the owner of land has no immediate use for it and is content to let another person trespass on the land
for the time being, it is hard to see what principle of justice entitles the trespasser to acquire land for nothing
from the owner simply because he has been permitted to remain on the land.”
Common Arguments for Adverse Possession



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
Prohibits the bringing of stale claims – similar to the law of limitations generally.
o
There is a public interest in people needing to be vigilant as to their rights, and certainty being created by that
principle.
Grants security/repose
Encourages the use and development of idle land.
o
Although, when looking at the conservation of land today, this may become problematic.
Grants title to someone who is not the documentary paper title holder – although adverse possession is a common law
doctrine, not an equitable doctrine.
Cures defects in conveyancing (strongest reason for justifying the continued reason for applying adverse possession)
o
Physical boundaries which may not match surveyed boundaries and through the doctrine of adverse
possession, that provides an adjustment for the mechanism of surveyed boundaries so that they are aligned
with physical boundaries.
80
6. Concluding Adverse Possession





Minimum limitation period is 12 years.
Important to know when the limitation period commences, the basic rule being that it does not start until the person
entitled to possession is out of possession and some other person in whose favour the limitation period can run is in
adverse possession.
Whether there is adverse possession, we look to the common law.
If before the 12 years have run a second person takes over the adverse possession, the limitation is satisfied when the
12 years from the first possessor runs; but if before the limitation period is satisfied and ceases to be adversely
possessed, then time starts all over again from the next date adverse possession occurs (i.e., adverse possession must
be continuous)
Different rules apply to future interests in land (i.e., a right to possession at some future time) – A cause of action here
will accrue when the holder of the future interest becomes entitled to possession, provided that after the person
becomes entitled to possession, and before the action is commenced, no other person is in possession of the interest
claimed (s69(1) LA)
o E.g., X conveys land to A for life and then to B  during A’s lifetime, B has a future interest, upon A’s death, B
has a right to immediate possession. If your right to immediate possession is lost, you also lose any future
interest as well.
81
Co-Ownership Answer Guide
Element 1: Focus of Answer
1.
Where to Focus in Exam Answer
a. If the question states the type of co-ownership and there are no facts to indicate to the contrary, just assume
the type of co-ownership stated in the facts and move onto their rights, termination etc.
b. If there is doubt as to the type of co-ownership or there is only facts relating to how title obtained etc, only
then need to spend time determining the type of co-ownership.
Element 2: State the Parties and Their Rights If Given
State: (X) and (X) + (any number of X’s) share the property as (Joint Tenants/ Tenants in Common).
-> If this information is not given (Move onto element 3).
-> If this information is given move onto the rights of the parties/ termination (depending on the question).
Element 3: Determine the Type of Co-Ownership:
Types of ownership
1.
2.
Joint tenancy; OR,
Tenancy in common
(If multiple people held interest inland, they can be in one of those categories)
Element 4: The creation of Co-Ownership
See Notes.
Element 5: Rights and Obligations between Co-owners
See Notes.
Element 6: Termination of Co-Ownership
See Notes.
82
Co-Ownership (Topic 6)
Co-Ownership Introduction
The law allows a number of peoples to be entitled to the same interests in one piece of land. Co-ownership (or concurrent
ownership) refers to the simultaneous entitlement of two or more persons to the same object of property, either real or
personal.





Co-ownership is not limited to land but is extended to chattels as well.
Dennis v Dennis (1971) 124 CLR 317  Talked about the possibility of co-ownership in a horse.
Co-ownership may also exist at law or in equity (the nature of co-ownership in law may be different to co-ownership in
equity)
Two categories of co-ownership are:
1. Joint tenancy
2. Tenancy in common
Thus, co-ownership may involve either a joint tenancy or a tenancy in common – sometimes there might be a joint
tenancy at law and a tenancy in common in equity.
1. Joint Tenancy



With a joint tenancy, the joint tenant, together with the other tenants, owns the entire interest in the land, but
individually, each joint tenant owns nothing.
Each joint tenant is entitled to the use, possession and enjoyment of the whole of the land, subject only to the rights of
the other joint tenants.
One joint tenant cannot alone deal with the land so as to bind the other joint tenants.
Two key features of a joint tenancy:
1.
2.
The four unities
The right of survivorship
1. Four Unities
These four requirements are essential to the existence of a joint tenancy.
1.
Unity of possession  each joint tenant is entitled to possession of the land (this is also a requirement with a tenancy
in common)
o No joint tenant, without agreement of the other joint tenants, is entitled to any exclusive possession because if
they were, it would mean separate ownership, rather than co-ownership.
o No joint tenant can lawfully eject the other from the land.
o Understanding unity of possession is essential in involving a comparison between sole ownership and coownership.

In practice, co-owners may agree to reallocate rights of possession, for example, one co-owner may decide to
lease the whole of the land from the other co-owners.
2.
Unity of interest  the joint tenant’s interest in the property be identical in nature, extent and duration
o There can be no joint tenancy between persons with interest of a different nature, e.g., a landlord and a tenant,
or a life tenant and a fee simple owner, or A with a ¾ interest and B with a ¼ interest.
o Diemasters Pty Ltd v Meadowcorp Pty Ltd (2001)
3.
Unity of time  the interest of all joint tenants must vest at the same time and by virtue of the same common event
(usually satisfied by unity of title existing)
o However, this requirement does not apply to a conveyance by a trustee to beneficiaries, or by a testator to
beneficiaries of a will.
o This is arguably abolished by s39 PLA
4.
Unity of title  all joint tenants derive their interests from the same instruments, or where the interest is not created
in writing by the same act, for example adverse possession.
83
o
E.g. If A transferred $50 to B one day, and the next day transferred $50 to C, B and C cannot be joint tenants o
Attorney-General v Vorne.

A rented out a bedroom flat under separate agreements to 4 individual persons, made at different times and
on different terms.

License provided that each occupant had the right to use the flat in common with the others, but without the
right to exclusive possession to any part of the flat

Court held that the license did not have the effect of creating a collective joint tenancy since the agreements
were in each independent of another, were on different terms, and operated over different periods of time –
they were also mere licenses.
2. Right of Survivorship (jus accrescendi)

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
Without survivorship, there can be no joint tenancy (as confirmed in Re Robinson 1943)
Fundamental point is that a joint tenant cannot devise his or her interest by will to another person and on death the
deceased joint tenant is simply removed from having any interest in the land.
While tenants in common can, by mutual agreement create a right of survivorship, there is no inherent right of
survivorship with a tenancy in common.
o E.g., A and B are joint tenants, A dies, B is now the sole owner of the land by virtue of survivorship.
Due to the right of survivorship, it is the most common way for spouters to hold property since the surviving partners
interest is secured without the need of any will.
It is also used as an asset protection device for a deceased estate.
With partnerships, a person may hold legal title as a joint tenant, while beneficial ownership as a tenant in common
Order of death
The importance of establishing the order of death is so that it can be determined which joint tenants’ estate gets the land by
survivorship.


E.g., A and B are joint tenants, and both die – if A had died first, the interest in the land would pass to B and visa versa
S120(d) PLA provides that if there is doubt as to which joint tenant survived the other, the property divulges as if the
joint tenant held that property as tenants in common as equal shares.
Companies
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A company can hold land as a joint tenant (s29(1))
The dissolution of a company, however, is equivalent to death (s29(3))
Joint tenants can deal intervivos during their lives with the interest.
With Torrens title land, the operation of the right of survivorship can be restricted where two or more joint tenants hold
the land as trustees (s61 of the Transfer of Land Act 1893)
o The words ‘no survivorship’ can be entered on the register with the result that while the joint tenants are still
bound by the right of survivorship amongst themselves, they cannot death with the land by mutual agreement
accept for Supreme Court order (s61(3))
o E.g., A and B are joint tenants, and trustees for Z. A dies. The court may prevent B becoming the sole owner
here by appointing a new trustee with B for Z’s benefit.
2. Tenancy in Common
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
Where two or more persons hold land as tenants in common, each has a proportionate interest in the land.
Their interests are not identifiable in any physical land, and one cannot claim to have a specific section of the land, and
another claim another section e.g., ‘this section is mine and that is yours’
For this reason, the share of a tenant in common is called an undivided share i.e., it is distinct, but not physically
divided.
Each tenant is ceased of his share only, not the whole, but each tenant is still entitled to physical possession of the
whole of the land.
Practical consequences of tenancy in common
a.
No right of survivorship between tenants in common, unless expressly agreed.
84
o
b.
c.
d.
e.
f.
g.
Therefore, if A and B are tenants in common, A can devise by will their interest in the land to beneficiaries of the
estate and via versa. If either A or B die, their interest will not pass to the other by survivorship unless it had been
agreed upon between the parties.
A tenant in common may generally have the freedom to deal with their undivided share as they wish by conveyance or
will.
If a tenant in common dies without a will, rules of intestacy under the administration act of WA apply.
Undivided shares need not be equal.
Any combination of purported interests is possible.
o E.g., one tenant may hold an estate fee simple, where the other holds a life estate.
Separate certificates of title can be issued to tenants in common for Torrens land.
While all 4 unities may exist for a tenancy in common, only the unity of possession is essential to a tenancy in common.
1. Creation of Co-Ownership

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
It is important that there is a distinction made between co-ownership at law, and co-ownership in equity.
For example, A and B may be joint tenants in common not a law, but in equity. The result would be that on A’s death, B
becomes the sole legal owner, but it is held on trust for himself and the estate of A
The legal owner holds legal title, while the equitable owner holds the right to use, enjoyment, possession and profits
from the land  legal owner really only has nominal ownership.
Can also be a legal and equitable owner.
2. Creation of Co-Ownership: Co-ownership at Law


The common law prefers joint tenancies, and has a presumption in favour of joint tenancies in the absence of evidence
to the contrary
Morley v Bird (1798) 30 ER 1192
o Here, a tenant divides property to the defendant on the condition that she paid money to 4 named persons.
o P1 was the sole survivor and claimed the whole money.
o The issue was whether the entitlement was as joint tenants or as tenants in common.
o It was held that a grants results in a joint tenancy accept where there are words of severance, or any of the 4
unties are missing.
o In this case, there were no words of severance so P1 was entitled to the whole of the money.
o Thus, a joint tenancy at law will be presume unless one or more of the 4 unities are absence, or there are
words of severance. If there is no words of possession at all, then there is simply no co-ownership.
Words of severance



Any words which indicate an intention to create undivided shares.
E.g., ‘one half interest to each of…’ or ‘to my three sons equally…’ or ‘to be divided between A and B…’
Through words of severance, the common law presumption of joint tenancy is easily rebutted
85
Robertson v Fraser (1871)
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Testator by a will appointed J and F to be his executors and beneficiaries – later by codicil, which amended the will, the
testator added W as an additionally executor and beneficiary.
J pre-deceased the testator
Issue was whether J, F and W hold as tenants in common, or joint tenants?
It was held, noting that the testator had provided that W was to participate in the bequest, the word ‘participates’
demonstrated an intention by the testator to divide i.e.. sharing by W in the estate Hathersly L: “Anything which in the
slightest degree indicates an intention to divide the property must be held to abrogate the idea of a joint tenancy and to
create a tenancy in common”.
While the courts will accordingly prefer tenancy in common where there was any doubt as to what was intended,
sometimes they will still find a joint tenancy, even though words of severance have been used (exception rather than
the rule)
o Exception typically occurs where there are contradictory words used and convenience and justice require this
interpretation.
o Re Barbour [1967]

Testator by will left land to a sister and two brothers to share and share alike as if they were joint
tenants.

One brother predeceased the testator.

If the grant here were held to create a tenancy in common, the small share of the deceased brother
would have been divided between 16 beneficiaries under the rules of intestacy.

Wonstell J held that the property was agricultural land which was worked together held by the other
land by the surviving brother and sister.

As the land would be fragmented if a tenancy in common was found, it was presumed that the
testator’s intention was to keep the land together and joint tenancy was intended ‘… to keep his land
in the family aggregation, and that his intention was reflected in his choosing as beneficiaries of his
disposition of the land in specie those who were managing and working the aggregation.

It is particularly significant that here, those who would benefit, had there been a tenancy in common,
were not concerned with the outcome of the case – there was simply not enough money involved.

The true principle of construction as confirmed by the court is that words of division and words of
joint tenancy alike, are remediable to contextual factors, including the kind of property involved and
considerations of convenience in enjoying and using the property.
o Interestingly, as noted in Forbes v Git [1922], where there is inconsistency that cannot be resolved, the first
words will prevail in a deed and the last words in a will.
Torrens Title Land and the Registration of Co-owners
s60 TLA: ‘Two or more persons who may be registered as joint proprietors of land shall be deemed to be entitled to the same as
joint tenants; and in all cases where 2 or more persons are entitled as tenants in common to undivided shares of or in any land
such persons may receive one certificate for the entirety or separate certificates for the undivided shares.’ – however, Landgate
require any instrument presented for registration involving co-ownership to state whether the co-owners are intended to take as
joint tenants or tenants in common, thereby avoiding the application of this provision


While registration conclusively determines the nature of an interest as so far as third parties are concerned, it does
prevent a joint tenant establishing that in equity they hold as tenants in common as between themselves (Calverley v
Green (1984))
Thus, registration at law is not conclusive of equity.
3. Creation of Co-ownership: Co-ownership at Equity
Contrary to the common law, equity prefers to treat parties as tenants in common in relation to the beneficial interest in the
property since is prefers certainty and quality, inherent in a tenancy in common. Co-owners who are tenants in common at law,
are always presumed to hold as tenants in common at equity – however, whenever parties have organised their affaires in such a
way as to show intention to hold beneficiaries as tenancy in common, equity will regard them as tenants in common, even
though they hold the legal title as joint tenants.
First category for presumption of tenants in common
This presumption applies in three situations:
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1.
2.
3.
Unequal contribution to the purchase price (or assumption of joint liability under a mortgage) by co-owners:
o Where co-owners provided the purchase price for property in a unequal shares, equity presumes that despite
their holding of legal estate as joint tenants, they hold the equitable estate as tenants in common, assumed
proportionate to their respective contribution (Calverley v Green (1984))
o Bull v Bull [1955]
 Mother and son purchased a house together with the son paying most of the purchase price and taking the
house in his own name.
 Later the son gave his mother notice to quit.
 The court held that the mother and son were equitable tenants in common and as each were entitled to
possession, the son could not evict the mother except by court order and upon the sale of the house.
 This principle also applies where a person assumes joint liability under a mortgage rather than contributing to
the purchase price (Calverley v Green (1984))
Rebutting of presumption:
o Evidence that the co-owners intended to take a joint tenant not withstanding their unequal contributions.
o E.g., Equal contribution between husband and wife where we would think that the parties would be happy for the
rule of survivorship to apply – these days, s79 Family Law Act is relevant to assets of marriage.
Where parties contribute in equal shares to the purchase price:
o Equity will treat these people as joint tenants of the purchase price, at least in the absence of any evidence that
the parties intended to hold as tenants in common (Lake v Gibson (1729))
o Ie. equity follows the law.
Second category for presumption of tenants in common
Money advanced on a mortgage, whether equally or unequally



Equity will presume a tenancy in common where two or more persons advance money on a mortgage whether in equal
or unequal shares (Re Jackson)
This is because mortgagees normally only lend money as an investment and it is unlikely that a deceased would intend
to forgo a debt if he died before repayment
Morely v Bird (1798) – ‘thought they take a joint security, each means to lend his own and take back his own’
o This presumption is rebuttable
o s67 and s68 of the PLA which entitles a mortgagor in good faith to assume that in a situation of multiple
mortgagees, any mortgagee can give a valid receipt for the moneys
Sections 67 Property Law Act 1969
Effect of advance on joint account
1.
Where —
a. in a mortgage, or an obligation for payment of money, or a transfer of a mortgage or of such an obligation, the
sum, or any part of the sum, advanced or owing is expressed to be advanced by or owing to more persons than
one out of money, or as money, belonging to them on a joint account; or
b. a mortgage, or such an obligation, or such a transfer is made to more persons than one, jointly and not in shares,
the mortgage money, or other money or money’s worth, for the time being due to those persons on the mortgage or obligation,
shall, as between them and the mortgagor or obligor, be deemed to be and remain money or money’s worth belonging to those
persons on a joint account; and the receipt in writing of the survivors or last survivor of them, or of the personal representative
of the last survivor is a complete discharge for all money or money’s worth for the time being due, notwithstanding any notice to
the payer of a severance of the joint account.
2.
This section applies if and so far as a contrary intention is not expressed in the mortgage, obligation or transfer, and has
effect subject to the terms of the mortgage, obligation, or transfer, and to the provisions thereof.
Section 68 Property Law Act 1969
Notice of trusts affecting mortgage money.
1.
Where a mortgage has been discharged, released or postponed as to the whole or any part of the mortgaged property a
person dealing in good faith with the mortgagee or with the mortgaged property, shall not be concerned with any trust
at any time affecting the mortgage money or the income thereof, whether or not he has notice of the trust, and may
assume unless the contrary is expressly stated in the instruments relating to the mortgage,
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a.
b.
that the mortgagees (if more than one) are or were entitled to the mortgage money on a joint account; and
that the mortgagee has or had power to give valid receipts for the purchase money or mortgage money and
the income thereof (including any arrears of interest) and to release or postpone the priority of the mortgage
debt or any part thereof or to deal with the same or the mortgaged property or any part thereof,
without investigating the equitable title to the mortgage debt or the appointment or discharge of trustees in reference thereto.
Third category for presumption of tenants in common
Business partners: Persons in a joint business venture or partnership contribute money in equal or unequal proportions towards
acquiring land as part of the business, equity will presume a tenancy in common as is proportionate to their respective
contributions
Lake v Craddock (1732)






L and others bought marsh land with the common intention that the land be drained and sold as a profit
There were no words of severance in the conveyance so they each held the legal estate as joint tenants.
After 5 years, C abandoned the venture and the remaining partners purchased further land in their names, but omitting
C.
L later brought action against all of them seeking a division of the partnership estate
Court held that all partners were joint tenants at law but tenants in common in equity, it would be unfair for the
survivorship rule to operate in an undertaking designed to produced profit since a deceased would lose all his investment
upon his death.
C was entitled to a share in the original land provided they also contributed to the second purchase of the land (i.e., ‘He
who seeks equity, must do equity’)
Thus, overall, equity will require the co-owners, although at law joint tenants, to hold the property on trust for tenants in
common in the relevant proportions.



When one party dies, the survivors hold the legal estate by survivorship.
Equity compels a trust of the deceased beneficial estate for those entitled under the deceased will or in testacy rules.
Note that in this category, a mere business purpose isn’t necessarily sufficient to attract the operation of equity – the
intention of the parties remains relevant.
Fourth category for presumption of tenants in common
This category is arguable
Malayan Credit Ltd v Jack Chia-MPH Ltd [1986]
Facts:


The plaintiff and the defendant as tenants shared a floor of an office building, whereby agreement between themselves,
they negotiated distinct unequal protons of the floor space and paid outgoings on distinct proportions.
Later, following a dispute, orders were sought for the sale of the lease, and an equal division of the proceeds.
Issue: Whether the parties were tenants in common or joint tenants? There were no words of severance used in the lease. Did
the fact that the purchase price, rent and variable outgoings being paid in various proportions permit a tenant in equity?
Outcome:



Court held that instances where joint tenants at law had been presumed to be tenants in common in equity, are not
confined to purchasees, co-mortgagees or business partners.
Where grantees held the premises for different purposes, equity would infer that the beneficial interest was held as a
tenant in common.
Here the lease clearly served different commercial interest – the parties had settled what areas they would occupy prior
to the grant of the lease, individually measured the areas and were invoiced for rent separately. Rent was effectively
equivalent to purchase money.
Stack v Dowden [2007]

The house of lords considered whether the equitable presumption should be extended to apply to a domestic purchase
of a residential property where the parties had made individualised contributions.
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


Here, the court conside4red a range of domestic circumstances in considering whether equity would find an equity in
common.
The court concluded that the presumption was that the parties here intended a joint tenancy in both law and in equity.
This presumption could be rebutted by evidence of the contrary intention.
Considerations Overall
Where equitable tenants in common of land later acquire the legal interest in the same land as joint tenants, but otherwise coextensive with their equitable interest? Here the equitable interest and legal interest merge – i.e., they become joint tenants at
law, and in equity.
Co-Ownerships’ Rights and Enjoyment (Topic 6.2)
1. Occupation Rent
1. Right to Occupation



Unless co-owners otherwise agree between themselves, a co-owner is entitled to occupy the whole of the property
along with any others who chose to do so (Bull v Bull), due to the principle of unity of possession (Thrift v Thrift)
Failure by a co-owner to occupy that land will not give co-owners a claim against co-owners in occupation (Luke v Luke),
either at common law or in equity
There are exceptions to this rule which can give to a non-occupying co-owner having a claim for occupation rent against
the co-owners in possession.
2. Exceptions to Right to Occupation
a.
b.
Where there is an agreement – the occupying co-owners may agree to pay an occupier rent in exchange for exclusive
possession.
o Lee v Dickerson o Here, there was a lease by one tenant in common to the other tenants in common, who in
return paid rent for the grant of exclusive possession
Occupation rent may be payable where there is ‘ouster’ – the ousted co-owner may claim occupation rent from the coowner in possession and recover that possession.
o Ouster  where an occupying co-owner wrongfully excludes the other co-owners from occupying the land o The
exclusion must have been wrongful, being sufficient to enable the court to infer a denial of the excluded coowners title and right to possession.
o Exclusion will be wrongful where a co-owner leaves as a result of violence, as considered in Re Forgerad, where
there was ouster through threats by a co-owner to call the police to remove the co-owner.
o The true nature of an ouster is that it constitutes a trespass by one co-owner against another’s rights in respect of
the property – a denial of title and right to possession.
o A temporary disturbance of access to land is not ouster, while changing locks to exclude a co-owner (for example)
is (Berethsford v Booth)
o Ouster in family situations can be difficult to determine.
o Viviano v Natalie, there is ouster occurring outside of a violence restraining order, but not occurring within the
time period of the violent restraining order.
o Just because an occupying co-owner makes it less pleasant for another co-owner to say, will not be ouster
(Ferguson v Miller), but there can be ouster where the co-owners in occupation create circumstances which make
it unreasonable to expect the ousted owner to remain (Re Thurgood)
 In Re Thurgood, the co-owner moved out because of his drinking habits, his wife said, if you come back here,
I’ll call the police
 The Queensland Supreme court held that a co-owner is evicted, where in the circumstances it is
unreasonable to expect the co-owner to exercise a right of occupancy.
3. Test for Ouster
Some courts have considered a broader assessment of fairness.



Re Pavlou [1993]: The court said that occupation rent would be awarded where it is necessary to do equity between the
parties.
Callow v Rupchev [2009]: the court favoured a general discretion to award compensation to an owner who had not
enjoyed possession.
Generally, ouster is likely to be settled by the family law act.
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4. Determining Occupation Rent



Where occupation rent is payable, it is calculated with reference to the open market rent for the property taking into
account the proportion of interest to which occupation has been enjoyed (Viviano v Natalie; Re Thurgood)
E.g., A and B and C are equal co-owners, and A wrongfully oust’s B and C  A is liable to pay B and C 2/3’s of the market
rent.
Calculating occupation rent is complexed, because adjustments will be made to take into account, for example, that the
owner was entitled to occupy only along with the other co-tenants – there was no right of exclusive sole possession that
has been lost.
Ryan v Dries (2002)  Illustrates complexity.




A and B were tenants in common – A have 53/100 share and B 47/100 share in the land  A claimed entitlement to an
occupation rent, a way of mortgage repayments A had made  A had been in occupation with B for period 1, although
B only intended to stay for weekends
During period 2, A was in sole occupation.
The court held that for period 1 the value of the occupation rent was $100000  A had $90000 worth and B $10000
worth for the weekend occupations – A’s enjoyment was therefore valued at $80000.
For period 2, the value of the occupation was $50000, the value of the occupation enjoyed by A over both period
equalled $130000, and the set off against the mortgage repayments was 43% of $130000 = $55900
Forgeard v Shanahan (1994)





F and S were joint owners and co-occupiers of a house
In 1981, the man moved out and the women stayed until the house was sold 10 years later.
She had paid the mortgage repayments and rates during that period, and she claimed reimbursement from the man’s
claim of the sale proceeds.
The court held that the mortgage repayments and rates, she had to deduct half of the value of the market rent for that
period.
While she had not wrongfully excluded the man, so was not liable for rent per se, she could not require him to pay half
of the costs of the maintenance and improvements without also accounting to him the extra benefit she had received
through sole occupation.
5. Compensation for repairs and improvements to land by one co-owner






At common law, a co-owner who has improved or repaired property without agreement from the other co-owners has
no claim for recovery of such costs (Leigh v Dickeson)
In equity however, when co-owners bring their co-ownership to an end, a co-owner may be given credit for any
improvements or lasting repairs made to the property if the other co-owners would benefit unfairly from no credit
being given (Squire v Rogers (1979))
If you claim for improvements, you must also set this off against liability for occupation rent.
“The making of improvements by one tenant in common in sole occupation gives rise to an equity attaching to the land
… analogous to an equitable charge – enforceable only in the event of partition or a distribution of the value of the land
… one party cannot take the increase in value without making an allowance for what has been expended in order to
obtain that increased value …” (Brickwood v Young (1905))
o Thus, for B to claim for improvements he also had to account for rents and profits in excess of his share
o Since this right cannot be exercised until the co-ownership comes to an end, it is regarded as a defence for
passive equity - the right will run with the land but will be defeated by a later purchaser of the land who has no
notice of this liability, or if its Torrens title land, by registration of the transfer to a third party
The principles of equity govern how the accounts are to be done – the amount to be reimbursed are to be limited to the
lower of the cost of the improvement and the increase in value
Squire v Rodgers
o The co-owned land was improved by the defendant after cyclone Tracey by establishing visitor accommodation
and a caravan park.
o The plaintiff as a co-owner and applied for an order for sale and accounts.
o The defendant had spent $100000 on improving the land which only led to an increase in $15000 – the reason
being, there was a great demand for accommodation immediately after the cyclone, but by the time of the sale
there was little demand for such accommodation.
o Dean J made two key points.
1. Regarding improvements carried out – the value added by reason of the improvements was less than the
cost in kerb. Here the active co-owner should be compensated for the lesser value, saying ‘he is entitled
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o
to an allowance for this expenditure on such improvements to the extent at which they result in the
present enhancement of the value’.
2. The act of co-owner – the defendant was entitled to retain the profits from the business he carried out
on the land, as distinguished from the profits derived from the common property per se which were to
be shared after the defendant was allowed to make good any shortfall between any value added and the
lesser cost incurred.
Rationale here is that but-for the cost incurred, there would have been no profits from the common property.

When an account is done in equity, the act of co-owner is only required to account for his share of the profits from the
common property per se, after he is fully compensated for the costs, he incurred from generating the profits ie. if a coowner accepts the profits, he must also accept his share of the costs of the burden in attaining those profits – no
reimbursement is given for the expenditure of time and effort (Houghton v Immer (No 155) Pty Ltd (1997)

Co-owner uses rent to finance improvements, other co-owners cannot claim a share of the rents without making
allowances for all the money spent (Fourgard v Shanahan)

The improving co-owner can participate in increases in the value of the land, over and above the cost of improvements
(Houghton v Immer)

Where a co-owner has only maintained the land as distinct from improving it, there is not entitlement to compensation
for the costs incurred, but repairs of a lasting nature are compensable (McMahon v Public Curator of Qld [1952])
o In this case, two tenants in common held a farm – one tenant in common build a house using recycled
materials at his own expense, the enhanced value of the land greatly exceeded the actual cost of the house on
an action for winding up.
o Court held that a basis of contribution, was to be the lower figure ie. the cost of the house, not the enhanced
value
o A claim for occupation rent was denied, since the house only occupied a very small portion of the land and was
built at his own expense.
o The court said: ‘the amount to which a co-owner making improvements may be entitled against another coowner, is limited to the actual cost of the improvements. And, if the present value of the increments to the
property is less than the actual cost of the improvements, he is further limited to that present value.
Expenditure for mere repair cannot be claimed.’
2. Right to Rent and Profits


By virtue of s27 in the Statute of Queen Anne, the common law was altered by permitting an action of an account
against other co-owners, or receiving more than their just share of proportion of rents
Statute of Anne 1705 (Imp) remains good law in WA
1. Limitations to Stature of Anne 1705:
Only applies to rent in profits that a co-owner has received from a third party – does not apply from money received or profits
from a co-owner’s own efforts, where other co-owners elect not to participate (Henderson v Eason (1851))




In this case, a sole owner farmed land for his own profit and the other co-owners claimed a share for the profits, arguing
that the occupying co-owner had received more than his just share.
Park J held: ‘The test for determining what was a just share is: if one co-owner employs his capital and labour in
cultivating the whole of the land, and the return on that venture greatly exceeds the rent or compensation for the mere
occupation of the land, then the other co-owners have no right to return in that capital and labour
In modern circumstances, this test can be sometimes difficult to apply – recent cases have allowed a co-owner receiving
rent or profits to set off against rent or profits, for example:
1. Outgoings expended to earn that income (Marriot v Franklin (1993))
2. An allowance for time and labour in earning the income (Squire v Rogers (1979))
Rees v Rees [1931]  brothers who worked crops were entitled to profits from those crops against the other two
brothers who did not
2. Equity and the Rights to Rent and Profits


In equity, the case of Ryan v Rhyes, equity will permit and account between co-owners where a co-owner has received
more than his share (Stralley v Wilson)
An account in equity applies only to profits form the third parties use for occupation of the land and not profits from a
co-owners own initiative and labour (Squire v Rogers (19779))
91


Note  a co-owner who has been ousted from land and who therefore is entitled to occupation rent from the coowner’s inoccupation, cannot also claim for an allowance in rent and profits as that would be overcompensation (Re
Thurgood)
Co-owners are not fiduciaries – one can only claim what was received from the land, not what could have been received
from the better management of the land (Bolter v Bolter)
In conclusion, a co-owner must account for money received from a third party in more than the proportion to which the land is
held, accept where it is from his own efforts. The account may be done in an action for petition and sale of the land.
3. Disposition of Interest by Co-owners






A co-owner, a joint tenant or a tenant in common, may sell or devise his interest, provided that this does not interfere
with the other co-owners right to possession.
Hedly v Roberts [1977]: ‘A joint tenant or a tenant in common can encumber his interest in the land so as to compel his
co-owner to submit to the encumbrance is the encumbrance does not interfere with the rights of that co-owner, to
possession of the land and his other rights with respect to the land.’
If a lease is granted by a tenant, the tenant cannot exclude other co-owners (Freeze v Unger)
The grant of a mortgage of a co-owner, will only effect the undivided share of that co-owner (Fulton v 523 Nominees
Pty Ltd [1984]
Where a tenant in common dies, his grant will bind his successes in title, but with a tenancy, the interest granted may
be extinguished on his death  difference in encumbrance granted by a joint tenant and encumbrance granted by a
tenant in common.
The disposition by a co-owner of his or her interest may have the effect of severing a joint tenancy and will consider
than later on.
4. Liability for Waste, Trespass and Obstruction of Use
All co-owners retain unity of possession and therefore cannot be sued for trespass, unless the owner has been wrongfully
excluded



Viviano v Natalie, the true nature of ouster is that it constitutes a trespass by one co-owner in regard to the owners’
rights in respect to the property.
Co-owner cannot commit waste – this is because they are all equally entitled to exercise possession and therefor ensure
that the land is properly kept.
Co-owner is entitled to carry out activities on the land consistent with the ordinary instance of ownership of the land,
however, liability does exist for voluntary waste.
o A co-owner cannot wilfully destroy the property and effect the interests of the remaining co-owners.
o Ferguson v Miller (1978); and
o Wilkinson v Haygarth (1847)
Termination of Joint Tenancy (Topic 6.3)
1. Methods for Termination of Joint Tenancy
1.
Survivorship  Results in conversion to sole ownership when the land vests in the sol’ survivor.
o Example: A and B are joint tenants, A died and by survivorship, the land is now held by B
2.
Severance  the process by which a joint tenancy is converted to a tenancy in common.
o Joint tenancy requires unity of possession, title and interest, so the destruction of any of these unities will destroy
a joint tenancy.
o Removal of the unity of possession will destroy any co-ownership whatsoever and destruction of the unity of tie is
impossible.
o Williams v Hensman (1861), there are three ways to sever a joint tenancy:
1) By a joint tenant acting on his share (referred to a severance by a unilateral act)
2) By the mutual agreement of joint tenants (severance in equity)
3) By any course of dealings (sufficient to intimate that all interests were mutually treated as constituting a
tenancy in common)
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1. Severance by a Joint Tenant Acting on his/her Share.



1.
This method of severance involves the destruction of one of the unities and is dependent upon mutual agreement with
the other co-owners.
If this is followed up by the declaration of a transfer, this will be enough for severance (Peldan v Anderson (2006))
A joint tenant cannot dispose of his interests by will, so this becomes an issue of alienation ie. sale, either at law or
inequity, or a joint tenant acquiring a greater interest in the land than the other joint tenants:
Alienation at law: Alienation by less than all joint tenancy will destroy unity of title.
 A and B are joint tenants  A sells to C, B and C are now tenants in common
 A and B and C are joint tenants  A sells to D, B, C and D are now tenants in common, as to D’s one third interest, but B
and C remain joint tenants as to a two thirds interest
 Certain requirements needed to create a legal interest in land.
 With general law land, a deed is required to create a legal interest in land (s33 PLA)
 Wright v Gibbons (1949)
o Three sisters were joint tenants in fee simple and to try and sever the joint tenancy, two sisters signed a single
transfer document by which each purported to transfer her interest to the other which was then registered
showing the three sisters as tenants in common with equal shares.
o One sister outlived the other two and then argued that there had been no effective alienation or severance o The
court held that unity of title was destroyed by the joint tenant transferring her interest to another joint tenant.
o In any event, the registration of the transfer was also effective as a severance because it was Torrens title land.
o Look at the Latham CJ in the decision and the various scenarios for possible transfers.
 In WA, it is also possible to sever a joint tenancy to oneself, under s44 PLA but has to be effective at law e.g., needs to
be by deed with general law land.
2. Severance in Equity




Even if there is no effective severance at law, there can be severance in equity.
Normally a declaration of trust or the imposition of a constructive trust, a gift or a contract of sale, but this can be
difficult to determine.
For a declaration of trust, it must be in writing where it relates to real property s34(1)(b) PLA.
Declaration of trust can be a quicker way of severance, rather than trying to register a transfer with Torrens title land, as
Mrs P had tried to do (Sackville & Nieve)
Corin v Patton
Facts:




Mr and Mrs Patton held land as joint tenants.
Mrs Patton was terminally ill and tried to sever the tenancy by signing a transfer of the land to her brother, C
A declaration of trust by C to hold the land on trust for Mr and Mrs P as tenants in common, and also signing her will
leaving her estate to her children.
She died before the transfer of the land was registered and before any authorisation had been given by her to the bank
to produce the certificates of title for registration of the transfer
Outcome:





The court held (Mason, Dean & McHugh) that at the time of her death, Mrs P had not done all that was necessary to
transfer the title, her certificate of title was still with the bank and accordingly, she had not effectively alienated her
interest.
The court held ‘if an intending donor of property has done everything in which it is necessary for him to have done to
effect a transfer of legal title, then equity will recognise the gift.’
Brennan J said that the transfer was not registered prior to her death, and therefore C had not acquired any interest in
the property.
Toohey J said equity would not enforce a transfer for which no consideration had been given – ie. equity would not
assist a volunteer.
HC held that a unilateral declaration of an intention to sever a joint tenancy is not severance, applying Williams v
Hendsman.
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

Here, equity would not complete an imperfect gift – here there was no effective declaration of trust, since what P had
done was a transfer. What P should have done was to register the transfer or sell part of the land to her brother by
contract of sale.
Decision applies to both general law and Torrens title land.
Davies v Davies [1983]

Communication of the declaration of the intention to sever was insufficient – there can be no unilateral severance by
will because a will only takes effect on the death of the testator. However, there can be severance by mutual wills,
2. Partial Alienation
An example of partial alienation is the grant of a mortgage or lease.


Mortgage:
o The grant of a mortgage will operate as a severance in relation to general law land but not in relation to Torrens
title land o If the mortgagor predeceases the other joint tenant, the mortgage is extinguished by survivorship.
o Lyons v Lyons [1967] – focus is on the nature of the security and its impact upon the unities, not the intention
of the parties.
Lease:
o It is unclear whether a lease by a joint tenant will operate to sever a joint tenancy o Despite the argument that
it does by destroying unity of possession, the best view in Australia is that it merely suspends the joint tenancy
during the time of the lease, as indicated in Frieze and Unger
o With the grant of a joint tenancy in leasehold, the grant of a sublease will destroy the joint tenancy.
o There is no severance where all joint tenants together sell or mortgage the land.
3. Severance of Joint Tenancy by Mutual Agreement







It appears that severance by mutual agreement is a further way of severance, under Williams v Hendsman)
While it was initially thought that the statutory requirements for enforceability for an interest in land, needed to be
met, the prevailing view is that these requirements do not need to be satisfied (Abela v Public Trustee)
Abela v Public Trustee [1983]  severance was sufficient by consent orders made by the family court for the sale
of house and division of proceeds. However, it is unlikely that an oral agreement in Australia would be sufficient,
with the need for writing in the absence of sufficient acts of part performance (Delainey v Meloy)
However, Bradbrook indicates that specific performance is not necessary.
Sport v Harper state that what is important is that the parties have acted in such a manner as to require an
inference of severance to be drawn, even if they have no knowledge of severance.
To state or give rise to the necessary inference that they consider their interest as distinct – severance will then take
effect immediately, even if future events are required.
An application under s79 Family Law Act in WA has been found to be insufficient for severance by mutual
agreement (Patzac v Lytton)
Mutual Wills:
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The making of mutual wills will sever a joint tenancy.
This involves both joint tenants to the effect that if one dies, the joint property will be left with the other.
The mutual wills are essentially treated as binding contracts, severing the joint tenancy at the time the wills
were entered into (Taylor v Taylor)
Severance by Course of Dealings


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Williams v Hendsman provided that there is a third category ‘severance by any course of conduct sufficient to intermate
that the interest of all joint tenants are to be treated under the interest as if tenants in common’.
This category should be considered and examined when, despite no mutual agreement being evidenced, negotiations or
a course of dealings between the parties make it clear that the interests of all joint tenants are treated by all as being
held as tenancy in common.
o This may be easier to establish where the joint tenants were in a personal relationship.
However, one cannot just say a course of dealings is present, just because certain preconditions are not met.
For example, in Magil v Magil, where negotiations were insufficient, there could be no severance.
o On the other hand, negotiations could be sufficient to indicate a sufficient course of dealings.
o An example of what would be a sufficient course of dealings would be the consistent deficient of rent received
from a lease between owners.
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o
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Re Denny: The tenancy had been severed. By treating the fund as thought they were tenants in common the
partners had by their common course of conduct shown an intention to sever the tenancy. The court also laid
down the rule regarding the burden of proof by providing that the party that seeks to allege that the joint
tenancy has been severed is required to prove this. This had been accomplished in this case.
While it may be difficult to determine if there is any mutual intention to establish a mutual agreement of course of
dealings, what is critical is that the parties must have acted in such a way that the law regards a joint tenancy as being
inconsistent (Sprot v Harper)
Australian courts have demonstrated some reluctance to find severance by course of dealings where there is no
agreement however (Golding v Hands (1969) WAR 121)
5. Severance by Merger

A joint tenancy is severed if a joint tenant acquires a further estate in the land, different from that already held as a joint
tenant.
Severance by Murder

If one joint tenant murders another, can the remaining joint tenant receive the land by survivorship?
o No because the forfeiture rule applies under which equity will deem the surviving joint tenant to hold the
interest of the deceased under constructive trust.
o Thus, murder does result of severance, not from the act of killing itself, but from the imposition of the
constructive trust o Here, the forfeiture rule will be strictly applied.
o Equity will enforce a constructive trust on the survivor, is not equitable to murder – will keep what they have,
but the other half will go to the beneficiaries of the deceased estate.
Forfeiture Rule
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
Forfeiture rule can be applied even where the survivor has been acquitted by murders and manslaughter (Rivers c Rivers
(2002))
o The court will enforce a constructive trust where one party has been acquitted.
o Equity in this scenario looks at the situation saying, if we allow the rule of survivorship freely, the deceased
estate will get nothing o Forfeiture rule here will be strictly applied.
Example of the application of the forfeiture rule can be seen in Rasmanis v Jurewitsch – A husband murders his wife,
and the court finds that he holds the deceased’s’ share on constructive trusts.
6. Severance by Bankruptcy
A bankruptcy order against a tenant will sever the joint tenancy in equity on declaration of the bankruptcy and at law on
registration of the bankruptcy, under s58 of the Bankruptcy Act
7. Severance by Court Order
For example, a judgement creditor executing against land held by a joint tenant (Guthree v ANZ Banking Group)
2. Termination of Co-Ownership
This provides that in considering the application of a co-owner for sale, the court can consider the nature of the land, the
number of the parties interested and the absence or disability of some of those parties

Termination can occur by patrician, which is a physical division of the property between the parties, or by sale. Partition
in theory is the primary remedy, but in realty sale is the most common remedy.
Section 126 of PLA 1969 (WA)
1.
2.
3.
Where in an action for partition the party or parties interested, individually or collectively, to the extent of a half share or
upwards in the land to which the action relates request the Court to direct a sale of the land and a distribution of the
proceeds, instead of a division of the land between or among the parties interested, the Court shall, unless it sees good
reason to the contrary, direct a sale accordingly.
The Court may, if it thinks fit, on the request of any party interested, and notwithstanding the dissent or disability of any
other party, direct a sale in any case where it appears to the Court that, by reason of the nature of the land, or of the
number of the parties interested or presumptively interested therein, or of the absence or disability of any of those
parties, or of any other circumstance, a sale of the land would be for the benefit of the parties interested.
The Court may also, if it thinks fit, on the request of any party interested, direct that the land be sold, unless the other
parties interested, or some of them, undertake to purchase the share of the party requesting a sale; and, on such an
undertaking being given, may direct a valuation of the share of the party requesting a sale.
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4.
5.
6.
On directing a sale or valuation to be made under subsection (3) the Court may give also all necessary or proper
consequential directions.
Any person may maintain such an action as is referred to in subsection (1) against any one or more of the parties
interested without serving the other or others, and —
a. It is not competent to any defendant in the action to object for want of parties; and
b. At the hearing of the cause the Court may direct such inquiries as to the nature of the land and the persons
interested therein, and other matters, as it thinks necessary or proper, with a view to an order for partition or sale
being made on further consideration, but all persons who, if this Act had not come into operation would have been
necessary parties to the action —
c. Shall be served with notice of the decree or order on the hearing.
d. Are bound, after the notice is so served, by the proceedings, as if they had originally been parties to the action and
shall be deemed parties to the action; and
e. Have liberty to attend the proceedings and any of those persons may within a time limited by rules of Court apply
to the Court to add to the decree or order.
On any sale under this section the Court may allow any of the parties interested in the land to bid at the sale, on such
terms as the Court deems reasonable as to non-payment of deposit, or as to setting off or accounting for the purchase
money or any part thereof instead of paying the same, or as to any other matters.
Section 127 of PLA 1969 (WA)
Proceeds of sale, how applied
1.
2.
3.
All money received under any sale under section 126 may, if the Court thinks fit, be paid to trustees appointed by
the Court, and applied, as the Court from time to time directs —
a. In the discharge of any encumbrance affecting the land directed to be sold; and
b. Subject to that encumbrance, in the payment of the residue to the parties interested.
Where the Court so directs, the trustees (if any) may apply the money in manner referred to in subsection (1), but if
the Court does not so direct, any party interested may apply to the Court for an order that the money be so applied.
Until the money can be applied as referred to in subsection (1) it shall be from time to time invested in such
securities as the Court may approve and the income thereof shall be paid to the parties interested.
3. Contractual Restraints on Sale or Partitions
When considering the doctrine of estates, there is a question of the enforceability of contractual restraints. This can also come
up with respect to sale or petition.
Nullagine Investments Pty Ltd v WA Club (1993) 177 CLR 635
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HCA held that a right of first refusal agreed between co-owners would not prevent the parties applying for sale under
s126, even if the agreed contractual procedure had not been complied with
Ultimately, the HC leaves open the question of whether a restraint on seeking s126 is an invalid restrain.
Lecture: It would be invalid, and the parties could not buy effectively by agreement to neither jurisdiction of the court
to consider relief
Brennan J: ‘The purpose [of s129] is to provide a statutory mechanism for terminating co-ownership land where the coowners fail themselves to agree on the manner in which co-ownership shall be terminated. The legislature has
facilitated the alienability of the land itself and the alienability of land is a policy of which the land itself supports,
accept where alienability is required for the protection of a disadvantage class. Co-owners have the capacity to deal
with their respective shares or interests and are at liberty to agree the terms in which the land will be disposed of or the
terms in which the shared interest of one or more co-owners will be acquired by another or others, or in the manner in
which the land in co-ownership shall be divided”.
S129 PLA – Power of the Supreme Court to divide up or order sale of chattels upon the application of a co-owner of not less
than a half-interest “Where any chattels belong to persons jointly or in undivided shares, the persons interested to the extent of
a half share or upwards may apply to the Court for an order for division of the chattels or of any of them, according to a valuation
or otherwise or for sale and division of the proceeds and the Court may make such order and give such consequential directions
as the Court thinks fit.”

Overall, this division contains three distinct powers:
1. In the case of special circumstances
2. In the case of the application by the holder or holder of a half interest or more
3. In any other circumstance on the application of an interested party.
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